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EXECUTIVE ORDERS
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EXECUTIVE ORDER NO. 83 -
STRENGTHENING THE ENFORCEMENT OF THE AGRI-AGRA LAW (PD 717) AND
LAUNCHING THE NDC AGRI-AGRA ERAP BONDS FOR RURAL DEVELOPMENT
WHEREAS,
the Government has, as a matter policy, given the highest priority to
the development of the agricultural and agrarian sectors and in
connection therewith, has called upon the private sector to share in
the responsibility of promoting and improving the productivity of these
sectors;
WHEREAS, a basic social policy has been laid by Presidential Decree No.
717, entitled “Providing an Agrarian Reform Credit and Financing System
for Agrarian Reform Beneficiaries Through Banking Institutions” or the
Agri-Agra Law, requiring the banking sector to allocate at least 25% of
its loanable funds for agricultural credit in general, of which 10% of
said loanable funds shall be made available to agrarian reform
beneficiaries as defined therein;
WHEREAS, various related Republic Acts have expanded the modes of
compliance by the banking sector with PD 717, to wit:
—
Extension of development loans
for educational institutions, cooperatives, hospitals and other medical
services; socialized or low-cost housing and local government units
without national government guarantee
—
Mandatory investment of all
unused Agri-Agra allocation funds in socialized and low cost housing
—
Exemption of banks from
compliance requirement of PD 717 when at least 5% of loanable funds are
directly lent to farmers’ association or cooperatives
WHEREAS, there is a need to increase and further improve compliance by the banking sector with the provisions of PD 717 through an alternative compliance mechanism to be able to increase the productivity of the agriculture and agrarian sectors;
WHEREAS, Sec. 4 of PD 717 allows the banking sector to invest in government securities declared eligible by the Bangko Sentral ng Pilipinas (BSP), and invest any portion of the amount set aside for agrarian reform credit not actually loaned out as a mechanism for alternative compliance with the requirements of PD 717;
WHEREAS, Sec. 9 of PD 1648, the Revised Charter of the National Development Company (NDC), authorizes NDC to issue, upon recommendation of the Secretary of Finance (DOF) and approval of the President, tax exempt bonds and securities guaranteed by the government to finance its operations;
WHEREAS, there is a need to authorize the issuance of long term bonds by NDC which shall be called NDC Agri-Agra Economic Recovery through Agricultural Productivity (ERAP) Bonds to support projects for economic growth under a revitalized rural development program undertaken by NDC in cooperation with the Department of Agrarian Reform (DAR) and the private sector;
NOW THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Republic of the Philippines, for the effective and efficient implementation of PD 717 and in order to address the government’s priority program, by virtue of the powers vested in me by law, do hereby order:
Section 1.
Sec. 2.
Sec. 3.
The features of the NDC Agri-Agra ERAP bonds shall be determined and
fixed by NDC in consultation with the DOF, which features shall be
competitive with existing bonds and securities in circulation in the
Philippine market.
The purchase or underwriting of these bonds by the banking sector shall
serve as compliance by it with the provisions PD 717.
Sec. 4.
The Fund shall be used exclusively for the development of the
agriculture and agrarian sectors and in the implementation of
identified development priority projects of NDC and of the Department
of Agriculture and Agrarian Reform for these sectors, such as but not
limited to, rice production joint ventures, establishment of food
chains, livestock and agri-processing support services and facilities,
and similar undertakings.
Consistent with NDC’s mandate as the corporate vehicle of the
government, the NDC shall act as the DAR’s corporate arm in the
mobilization and utilization of the Fund.
Sec. 5.
The implementing rules and regulations shall utilize an integrated,
holistic or systematic approach in defining the scope of beneficiaries
of the Fund, to include but not limited to providers of production
input, critical social, development services or products, processors,
distributors, or markets of communities which have agrarian reform
beneficiaries or landless peasants.
The implementing rules and regulations shall also utilize alternative
modes of fund utilization to improve the efficiency and effectiveness
of projects in these sectors, to include guarantees, concessional
co-financing loans, equity or quasi-equity and quasi-debt instrument in
project trusts bonds or securities of qualified project enterprises,
and such other models as may be determined by the NDC and
DAR.
Sec. 6.
Sec. 7.
DONE in the City of Manila,
this 25th day of December, in the year of Our Lord, nineteen hundred
and ninety-eight.
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