Agrarian Production Credit Program (APCP)National Program Management Committee

Resolution No. 008Series of 2014

Resolutions Approving the Amendments and Addenda to the Memorandum of Agreement (MOA) and Implementing Rules and Regulations (IRR) of APCP and NISCOs request for Loan Restructuring/Refinancing of its Past Due Loans

WHEREAS, the DA, DAR and LANDBANK jointly implemented the Agrarian Production Credit Program (APCP) which provides credit, technical assistance and other support services to ARBs through their ARB organizations;

WHEREAS, the APCP has been implemented for more than two (2) years during which, several issues cropped up which need to be addressed to improve the credit delivery, development assistance, and to benefit more ARBs so that the program will become even more responsive to their financing needs. As of 31 October 2014, P828 Million worth of loans was approved, of which, P577 Million has been released to 256 ARB Organizations benefiting 10,684 ARBs in 45 provinces; and

WHEREAS, the NISCO requested to restructure/refinance its past due loans amounting to P 25 Million due to lack of capital to pay the past due loans attributed to its defaulting loan sub-borrowers, among others.

WHEREAS, the following provisions of the MOA/IRR are hereby amended/added:

ReferenceFromTo

A. Memorandum of Agreement (MOA)

Article II.2 Three Hundred Million Pesos (PhP 300,000,000) of the initial amount of P1 Billion for CY 2012 has been allocated exclusively for Negros OccidentalAn initial Three Hundred Million Pesos (Php 300,000,000) of the Program Fund is allocated for Negros Occidental considering the magnitude of ARBs and lands to be distributed in the province.

Article II.4The interest earnings from the trust placement shall be reverted by DA to the National Treasury.

Fifty (50%) percent of the net interest earnings from the trust placement with LANDBANK shall be used as the operating fund of the Program based on the approved work and financial plan by the APCP National Program Management Committee. The remaining interest earnings from the trust placement with LANDBANK shall be reverted by DA, through the TBG to the Bureau of the Treasury.

Article IIIEach party to this MOA shall exercise its best effort to accommodate the other partys request, as long as the same are reasonably necessary in carrying out the activities envisioned in this MOA.Each party to this amended MOA shall exercise its best effort to accommodate the other partys requests, as long as the same are reasonably necessary in carrying out the activities envisioned in this MOA, provided that the requests conform to the terms of this MOA.

Article III.1.bThrough its attached agencies, provide basic support services, such as but not limited to marketing assistance and packages of technology to qualified ARBOs.Through its bureaus, the attached agencies and regional offices provide basic support services, such as, but not limited to marketing assistance and packages of technology of qualified ARBOs.

B. Implementing Rules and Regulations (IRR)

Section F.4

The interest earnings from the trust placement shall be reverted by DA, through TBG, to the National Treasury.

An operating fund shall be set up for APCP operations. The APCP NPMC Chair shall authorize LANDBANK to transfer 50% of the net earnings from the trust placement to the special account, based on the approved work and financial plan by the APCP NPMC and authorize the ACPC to draw from the said special account. The remaining interest earnings from the trust placement with LANDBANK shall be reverted by DA, through the TBG to the Bureau of the Treasury.

Section F.1The APCP is a transition credit program which will prepare the ARBOs to become credit conduits to address the credit needs of their members. The APCP is a transition credit program which will use a graduated scheme in providing credit to prepare the ARBOs/POs to become bankable and pass the regular criteria of the bank.

Transition PeriodThe eligible conduits are entitled to 1 to 4 crop cycles depending on the production cycle of agricultural crops to be produced but not to exceed two (2) yearsAll ARBOs, FOs other than ARBOs and POs shall graduate from the program to the regular lending window of LANDBANK after the transition period of three (3) years reckoned from the date of first release of original loan under the APCP subject to passing the Enhanced Coop Accreditation Criteria (ECAC). Said transition period shall also cover past due loans paid through the guarantee fund that were subjected to the original two (2) year transition period.

Loan RestructuringLoan Restructuring may be granted to those affected by Calamity as certified by the MAO.Loan Restructuring (with refinancing) may be granted only once to existing loans and past due loans paid through the guarantee based on the following reasons:

1. Calamity subject to validation/certification by the MAO. The amount to be restructured shall be net of PCIC claims (if any).

2. Other justifiable reasons subject to validation/recommendation of LPMC and approval by NPMC.

Said restructured loans shall still be covered by APCP guarantee.

Maximum Loan AmountFor crop production total credit requirement of the eligible borrowers as determined by LANDBANK

For working capital and fixed asset acquisition projects 10% of the outstanding loan portfolio of the ARBO but not to exceed P 1,000,000

The debt-to- equity ratio shall be waived for ARBOs and FOs other than ARBOs only.

For crop production total credit requirement of the eligible borrowers as determined by LANDBANK

For agri-enterprise and/or livelihood projects:

1. For those with existing crop production loan up to 10% of loan portfolio of the borrowers.

2. For those without existing crop production loan under the APCP, up to P1 million per borrower.

The debt-to- equity ratio shall be waived for eligible borrowers other than Other Conduits.

General GuidelinesNoneThe Board of Directors and Officers of the ARBOs, FOs other than ARBOs, and POs shall be given one (1) year moratorium on Tax Identification Number (TIN) requirement, reckoned from the date of loan application, due to the following reasons:1. They were denied of TIN registration by BIR due to absence of birth certificate as evidenced by a letter of denial or equivalent document from the BIR; and2. They do not have birth certificate records from the NSO as certified by NSO on such or any equivalent document if NSO does not want to certify.

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED that this Committee, upon consideration of the request of NISCO on loan restructuring/refinancing, hereby approves the said request subject to existing APCP program policies.

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED that this Committee, upon consideration of its rationale and objectives, hereby approves the amendments and addenda to the APCP MOA and IRR.Approved this ___ day of ____________ 2014 in _______________________ Philippines.

APCP Program Management Committee

Edilberto M. De Luna PMC ChairAssistant Secretary, DA

Cecilia C. Borromeo PMC Vice-ChairExecutive Vice-President, Land BankRosalina L. Bistoyong PMC Vice-ChairUndersecretary, DAR

Carlos O. Tulali PMC MemberFarmer Representative TFMJohn C. Bugaling PMC MemberFarmer Representative - PARC

Maria Edita Z. Tan PMC Member Ralph C. Pablo PMC MemberAssistant Secretary, DOF Director, DENR