(NAR) VOL. 26 NO. 4/ OCTOBER - DECEMBER 2015
2.10.1 Small Crop Growers - refer to owner-cultivator, tenants, leaseholders, etc. who are tilling not more than five (5) hectares of agricultural lands (RA 6657).2.11 Small Fisherfolk - refers to the following:
2.10.2 Small Poultry and Livestock Raisers - refer to those having the following maximum hog, poultry and livestock inventory at the time of accreditation by the PLI:
a. Poultry - 2,000 layers or 5,000 broilers;
b. Swine - 10 sows or 50 fatteners;
c. Goat/Sheep - up to 50 heads for meat and/or dairy d. Cattle - 10 fatteners or 5 breeders;
e. Dairy - 10 milking cows/carabaos
2.11.1 Coastal Fisherman - owns or operates a fishing boat, including paraphernalia with total weight of not more than three (3) gross tons and conducts fishing activities within fifteen (15) kilometers from the shoreline.2.12 Unsecured Loan - refers to the amount of loan not covered by Real Estate Mortgage (REM) and/or chattel mortgage, or any other form of acceptable collateral.
2.11.2 Fishpond Operator - owner/operator of fishpond(s) of not more than five (5) hectares including those under fishpond lease agreement (FLA).
2.11.3 Fishcage Operator - owner/operator of fish cage(s) with total area of not more than 400 square meters.
2.11.4 Those engaged in aquaculture, which covers all forms of raising and culturing fish, shellfish, seaweed production, and other fishery species in brackish and marine areas of not more than five (5) hectares.
3.1.1 The Governing Board shall be composed of the following:3.2 Internal Audit Committee of the GB
Chair - DA Undersecretary Members - Representative, DAR (at least Assistant Secretary) Representative, DOF (at least Assistant Secretary) Representative, NAPC (at least Assistant Secretary) Representative, LANDBANK (at least Vice President) Representative, ACPC (at least Deputy Executive Director) Representative, Academe Representative, Partner Lending Institution (PLI) Program Executive Director (Ex-Officio, Non-voting)
The members of the AGFP Governing Board coming from government agencies shall be officially designated by the heads of their respective offices. Representatives from the Academe and PLI shall be appointed by the Secretary of Agriculture. GB Members shall appoint their respective technical assistants.
3.1.2 The GB shall set policy directions and oversee the implementation of AGFP. Specifically, the GB shall:• Exercise Authority and Supervision over the PMO through the
Program Executive Director;
• Approve the Organizational Structure and staffing complement of the PMO;
• Approve policies, programs, and procedural guidelines that will govern the program implementation;
• Approve the AGFP Annual Work and Financial Plan;
• Set guarantee line limits and credit ceilings per hectare/
commodity;
• Approve the leveraging ratio in coordination with the Bangko
Sentral ng Pilipinas (BSP);
• Oversee the utilization and investment of the AGFP Fund;
• Submit annual reports of the status of the Fund to the DA Secretary;
• Authorize the Institutional Manager or the Program Executive
Director to enter into contracts as it may deem necessary;
• Create Committee(s) and working group(s) as it may deem necessary;
• Delegate authority to the PMO as it may deem necessary.
3.2.1 Internal Audit Committee (lAC) of the GB shall be created by the GB. The lAC Chair and two (2) other members of the committee shall be appointed by the GB Chair from among members of the GB.3.3 Program Institutional Manager
3.2.2 The lAC shall review the reports of the Internal Audit Division (lAD)
of the PMO and shall report the results of the review to the GB on a regular basis.
3.3.1 Pursuant to Section 3.4 of the DA Administrative Order No. 23, series of 2008, LANDBANK shall act as the Program Institutional Manager (PIM) for all guarantees extended by AGFP. The PIM shall:3.4 Program Management Committee (PMC)• Act as administrator of the PMO3.3.2 In case where LANDBANK itself is the institution being guaranteed by the AGFP, approvals shall be made by the GB. The LANDBANK Representative in the GB shall inhibit himself/herself during the discussion and/or deliberation to avoid conflict of interest.
• Provide office space to the PMO
• Provide the PMO with the facilities required for its operations
• Book and disburse operational expenses based on the GB
approved work and financial plan/resolutions
• Enter into agreement with concerned parties as approved by the
Governing Board;
• Issue instructions to the LANDBANK Trust Banking Group and Cash Department to effect withdrawals from the AGFP Accounts, as approved by the Governing Board or its designated approving authorities.
3.4.1 The PMC shall be composed of the following:3.4.2 The Chair of the PMC shall come from the Program Institutional Manager and shall be designated by the President of Land Bank of the Philippines. The Vice - Chair and members of the PMC shall be designated by the heads of their respective offices.Chair - LANDBANK Representative (1)
Vice-Chair - DA-ACPC Representative (1)
Members - LANDBANK Representative (1)- DA Representative (1)
- DAR Representative (1)
3.4.3 The functions of the PMC are as follows:• Confirm guarantee line and guarantee claims payment approvals made by the PMO;
• Approve/disapprove guarantee lines and guarantee claims payment within its delegated authority;
• Recommend for GB approval requests for guarantee lines and guarantee claims payment beyond its authority;
• Perform other tasks/acts as may be assigned by the GB.
3.5.1 The PMO shall provide technical and administrative support to the
Governing Board in carrying out its functions.Specifically, the PMO shall:• Execute policy decisions of the Governing Board (GB);
• Prepare annual work plan and operating budget of the AGFP for review by the PMC and endorsement to the GB for approval;
• Recommend policies and procedures for GB approval;
• Prepare monthly financial statements, and other reports to the
GB;
• Conduct activities to promote awareness and interest among targeted partners of the AGFP;
• Facilitate and conduct meetings, conferences, workshops, and training activities;
• Process, evaluate, approve/disapprove guarantee lines/claims and elevate those that are beyond its approving authority to the PMC/GB;
• Validate guarantee claims;
• Process request for claims payment within the prescribed period;
• Manage the guarantee portfolio of the AGFP and make recommendations to the GB for the utilization/ investment of the Fund;
• Perform other tasks as may be assigned by the GB.
• Marketing and Accounts Management Division (MAMD)
• Claims and Recovery Division (CRD)
• Finance and Administration Division (FAD)
• Internal Audit Division
The GB shall exercise supervision over the Internal Audit Division.3.5.3 The staffing complement of the PMO shall be subject to approval by the GB.
Eligible borrowers for guarantee cover are small farmers and fisherfolk (SFF) or group of farmers/fisherfolk borrowers who are engaged in agricultural food production.4.2.2 Eligible Accounts for Guarantee Cover
Accounts eligible for guarantee coverage must meet the following conditions:
4.3 Guarantee Feea. Unsecured loans/accounts of eligible borrowers not covered by real estate mortgage (REM) and/ or chattel mortgage (CM), or any other form of acceptable collateral. If partially secured, only the unsecured portion shall be eligible for guarantee coverage;
b. Loan purpose is to finance palay and other food
crops/commodities production; and
c. Accounts which were released to the borrowers by the PLIs not more than sixty (60) days prior to enrolment for guarantee coverage, provided there is no damage to the crop at the time of enrolment for guarantee cover.
The PLI shall pay the guarantee fee based on the amount of the loan as indicated in the PN and the guarantee period of the crop/commodity as defined in Section 4.8.2.4.4 Eligible PLIs
The guarantee fee shall be reviewed and approved by the Governing
Board on an annual basis.
4.4.1 Banks (e.g. Universal Banks, Commercial Banks, Rural Banks, Cooperative Banks, Thrift Banks)4.5 Eligibility Requirements for PLIs
4.4.2 Cooperatives
4.4.3 Corporations that lend to SFF
4.4.4 Non-Government Organizations and Farmers’ Organizations
a. Satisfactory credit standing with creditors, if any;4.5.2 Cooperatives
b. CAMELS Rating of at least 3;
c. Past due ratio net of valuation reserve, of not more than 15%;
d. At least two-year track record in lending to farmers;
e. Capital adequacy ratio of at least 10%;
f. Adequate reserve requirement;
g. Profitable on the year preceding the application and as of the time of application for guarantee line;
a. Registered with Cooperative Development Authority (CDA)4.5.3 Corporations that lend to SFF
b. Satisfactory credit standing with creditors, if any;
c. Past due ratio net of valuation reserve, of not more than 25%;
d. At least two-year track record in lending to farmers;
e. Risk asset ratio (for credit cooperative) of not less than 10%;
f. Complete part-time or full-time core management team;
g. Profitable on the year preceding the application and as of the time of application for guarantee line;
a. No ownership and/or labor dispute for the past three (3) years; b. Past due ratio net of valuation reserve, of not more than 15%; c. Satisfactory credit standing with creditors, if any;4.5.4 Non-Government Organizations
d. Profitable on the year preceding the application and as of the time of application for guarantee line;
e. At least 60% Filipino-owned;
f. Debt-equity ratio of not more than 80:20;
g. At least two-year track record in lending to farmers.
a. Registered with Securities and Exchange Commission (SEC); b. Past due ratio net of valuation reserve, of not more than 25%; c. Satisfactory credit standing with creditors, if any;4.5.5 Farmers’/People’s Organizations other than Cooperatives
d. Complete part-time or full-time core management team;
e. Net Surplus on the year preceding the application and as of the time of application for guarantee line, if applicable;
f. At least two-year track record in lending to farmers.
a. Registered with a registering entity (e.g. SEC, NIA, etc.);4.6 Guarantee Line Approval and Renewal
b. Operational and with satisfactory credit standing with its creditors, if any or with supervising government agencies/entities such as NIA, DOLE, DAR, etc;
c. With functioning Board of Directors or its equivalent, and
presence of core management team (e.g. manager, bookkeeper and treasurer or officially designated officers to manage the lending program);
d. Positive net worth on the year preceding the application and as of the time of application for guarantee line;
e. With lending policies and guidelines and with basic recording system (e.g. loan disbursement and collection systems, etc.);
f. At least two-year track record in lending to farmers;
g. Past due ratio net of valuation reserve, of not more than 25%.
4.6.1 A guarantee line shall be established for an eligible PLI, subject to the approval of the AGFP approving authorities.4.7 Request for Guarantee Coverage
The approved guarantee line shall be the maximum amount of guarantee cover that can be extended to the PLI at any given time.
A guarantee line shall be valid for a period of one year.
4.6.2 Renewal shall be subject to the satisfactory performance of the
PLI based on the criteria set by the GB.
4.6.3 All PLIs with approved guarantee line shall execute a guarantee agreement with the AGFP.
4.6.4 The AGFP may terminate the guarantee line for breach or violation by the PLI of any of the terms and conditions in the guarantee agreement and of the provisions of this IRR.
4.6.5 The PLI may terminate the same for any justifiable cause upon serving notice to the AGFP at least 15 days prior written notice to such effect notwithstanding any provision herein or in the pertinent AGFP Governing Board Order.
4.8.1 The guarantee cover shall be deemed effective if:a. The guarantee fee is paid within the sixty (60) day period;4.8.2 The guarantee fee shall be based on the production cycle of the crop/commodity, as follows:
b. There is no damage to the crop/commodity at the time of enrolment for guarantee cover; and
c. Masterlist of eligible accounts for guarantee are submitted within fifteen (15) calendar days from the date of payment of guarantee fee.
Non-submission of the master list of eligible accounts for guarantee within the prescribed period shall make the coverage null and void.
Ac t i v i ty
Guarantee
PeriodGuarantee Fee
Regular
ARB
No t PCIC
InsuredPCIC
InsuredNot PCIC
InsuredPC IC
InsuredPa l ay Producti on
5 mont hs
0 . 85%
0 . 45%
0 . 45%
0 . 25%
P i neapple (Pl ant)
2 3 mont hs
3 . 85%
1 . 95%
1 . 95%
1 . 00%
(Ra t o on )
2 0 mont hs
3 . 35%
1 . 70%
1 . 70%
0 . 85%
Sugarcan e (Pl ant)
1 4 mont hs
2 . 35%
1 . 20%
1 . 20%
0 . 60%
(Ra t o on )
1 2 mont hs
2 . 00%
1 . 00%
1 . 00%
0 . 50%
Cor n
6 mont hs
1 . 00%
0 . 50%
0 . 50v
0 . 25%
Cassav a
1 4 mont hs
2 . 35%
1 . 20%
1 . 20%
0 . 60%
O t her short t erm crops/ commod iti es
7 mont hs
1 . 20%
0 . 60%
0 . 60%
0 . 30%
F i shpond/
fishcage
operationsBangu s
8 mont hs
1 . 35%
0 . 70%
0 . 70%
0 . 35%
T il apia
7 mont hs
1 . 20%
0 . 60%
0 . 60%
0 . 30%
Praw n
8 mont hs
1 . 35%
0 . 70%
0 . 70%
0 . 35%
Cra b
8 mont hs
1 . 35%
0 . 70%
0 . 70%
0 . 35%
Ca tfi sh
8 mont hs
1 . 35%
0 . 70%
0 . 70%
0 . 35%
Poultry/ Livestock
Layer
2 0 mont hs
3 . 35%
1 . 70%
1 . 70%
0 . 85%
Bro il er
3 mont hs
0 . 50%
0 . 25%
0 . 25%
0 . 15%
Goa t (breeding)
7 mont hs
1 . 20%
0 . 60%
0 . 60%
0 . 30%
Goat( fattening)
7 mont hs
1 . 20%
0 . 60%
0 . 60%
0 . 30%
Pou lt ry/ Li vestock
Note:
*Milk
ProductionHo g (breedi ng)
1 4 mont hs
2 . 35%
1 . 20%
1 . 20%
0 . 60%
Ho g (f att eni ng)
7 mont hs
1 . 20%
0 . 60%
0 . 60%
0 . 30%
Ca ttle ( f att eni ng)
8 mont hs
1 . 35%
0 . 70%
0 . 70%
0 . 35%
Cattle (breed i ng)
1 1 mont hs
1 . 85%
0 . 95%
0 . 95%
0 . 50%
Carabao (breed i ng)
1 5 mont hs
2 . 50%
1 . 25%
1 . 25%
0 . 65%
Carabao (da i ry)*
1 1 mont hs
1 . 85%
0 . 95%
0 . 95%
0 . 50%
Goat (dai ry)*
6 mont hs
1 . 00%
0 . 50%
0 . 50%
0 . 25%
Cattle (dairy)*
1 1 mont hs
1 . 85%
0 . 95%
0 . 95%
0 . 50%
For the PLI’s long term exposures that are related to agricultural food commodity production, guarantee coverage shall be subject to the guidelines to be set by the Governing Board.4.9 Risks and Events of Default Covered by Guarantee
4.8.3 AGFP at any time may cancel guarantee coverage of accounts/loans enrolled due to non-compliance with the AGFP eligibility requirements.
4.9.1 The guarantee shall cover all risks, from losses due to non- payment of loans including those that are caused by the following, but not limited to:4.10 Guarantee Claim Payments
• natural calamities (such as typhoons, floods, etc.)
• pests and diseases
• market aberrations
4.9.2 Fraud or willful misrepresentation on the guarantee coverage and guarantee claims on the part of the PLI shall not be covered and which may be used as basis for termination or revocation of guarantee line.
4.10.1 A guarantee claim shall be filed by the PLI to the AGFP PMO within sixty (60) calendar days after the last maturity date in the batch, supported by the following:5.0 COLLECTION OF ACCOUNTS
a. List of accounts being claimed for guarantee payment;
b. Copy of duly accomplished promissory notes (PNs);
c. Copy of Disclosure Statement (for banks);
d. PLIs affidavit of non-payment;
e. Duly received demand/collection letter issued by the PLI to the borrower;
f. Statement of account of the borrower as of date of filing of claims;
g. Reason for and proof of occurrence of calamity/pest and/or disease occurrence, if applicable.
4.10.2 Claims shall be paid as follows:
a. Initial payment of 80% of the guarantee shall be made as follows:
1. 50% after validation of enrolment of accounts requested for claims payment; and
2. 30% net of invalid accounts after review of complete supporting documents.
b. Field validation shall be conducted prior to final payment which shall be net of recoveries and/ or claims found invalid for payment.
c. The PMO shall validate at least 20% of the total guarantee claims of the (CLAIM) batch. Should the invalid guarantee claims exceed 10% of the claims being validated, all claims in the batch shall be considered invalid.
d. Payment of the AGFP shall be applied to the principal of the
loan of the SFF.
e. Guarantee claims payment found invalid for claims payment shall be treated as accounts receivable of the AGFP from the PLl.
f. PLIs shall remit to the AGFP the amount corresponding to the invalid claims within thirty (30) working days from the date of notice.
g. Settlement of the amount shall become a pre-approval requirement for renewal of guarantee line.