PROVIDING AN AGRARIAN REFORM CREDIT AND FINANCING SYSTEM FOR AGRARIAN REFORM BENEFICIARIES THROUGH BANKING INSTITUTIONS.

• Number: Presidential Decree No. 717
• Sections: 7

Preamble

WHEREAS, it is a declared national policy to give first

priority to measures for the adequate and timely financing of the

Agrarian Reform Program;

WHEREAS, government and private banking institutions are in

the best position to extend adequate agrarian reform credit to agrarian

reform beneficiaries;

WHEREAS, there is a need of flexibility of government policy

on agrarian reform credit and for a realistic approach to the credit

needs of agrarian reform beneficiaries;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution,

do hereby decree and order to be part of the laws of the land the

following:

Section 1

SECTION 1. There shall be evolved an agrarian reform credit

and financing system for the beneficiaries of agrarian reform, namely:

tillers, tenant-farmers, settlers, agricultural lessees, amortizing

owners, owner-cultivators, farmers cooperatives and compact farms,

through government and private banking institutions.

Agrarian reform credit, as used herein, shall include production or

other types of loans for acquisition of work animals, farm 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 and/or

acquisition of facilities for production, processing, storage and

marketing; and efficient and effective merchandising of agricultural

commodities stored and/or processed by the facilities aforecited in

domestic and foreign commerce.

Section 2

SEC. 2. The credit mentioned in the next preceding

Section may be extended to the beneficiaries named therein based on the

feasibility of the project and their paying capacity, their estimated

production, and/or securities they can provide as well as such assets as

may be acquired by them from the proceeds of the loan.

Section 3

SEC. 3. All banking institutions, whether government or

private, shall set aside at least twenty-five per cent (25%) of their

loanable funds for agricultural credit in general, of which at least ten

per cent (10%) of the (loanable funds shall be made available for

agrarian reform credit to beneficiaries mentioned in Section 1 hereof: Provided,

however, that loanable funds as used in this Section shall refer

to funds generated from the date of effectivity of this Decree; Provided,

further, that the National Economic and Development Authority may

increase or decrease such percentages whenever so recommended by the

Department of Agrarian Reform and the Central Bank of the Philippines

taking into consideration the magnitude of the credit needs of the

beneficiaries of agrarian reform.

Section 4

SEC. 4. The Central Bank of the Philippines, in

consultation with and/or upon the recommendation of the Department of

Agrarian Reform, shall promulgate such rules and regulations as may be

necessary to implement the provisions of this Decree. Subject to such

rules and regulations, banking institutions may be allowed to:

Invest, in such government securities as may be

declared eligible by the Central Bank of the Philippines, any portion of

the amount set aside for agrarian reform credit not

actually loaned out; Provided, however, that the

issuing government entity shall stand ready to monetize, encash or

repurchase such securities whenever funds are needed by the

banks holding the said securities, for lending to the

beneficiaries of agrarian reform; and

Rediscount with the Central Bank of the Philippines eligible

paper covering agrarian reform credits.

Section 5

SEC. 5. All laws, decrees, rules and regulations, or parts

thereof, as may be inconsistent herewith are hereby repealed or modified

accordingly.

Section 6

SEC. 6. This Decree shall take effect immediately.

Done in the City of Manila, this 29th day of May, in the year

of Our Lord, nineteen hundred and seventy-five.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary