QuestionsQuestions (Republic Act No. 8425)
RA 8425 is titled the “Social Reform and Poverty Alleviation Act.” It institutionalizes the Social Reform and Poverty Alleviation Program, creates the National Anti-Poverty Commission (NAPC), defines its powers and functions, and provides for other related purposes.
Section 2 declares State policy to adopt area-based, sectoral, and focused poverty interventions; pursue asset reform; institutionalize/enhance the Social Reform Agenda (SRA); define principles/strategies for accountability and sustainability; adopt gender-responsive and ecological balance approaches; consider population and development principles; and focus SRA implementation on specific target areas and basic sectors.
“Basic sectors” are disadvantaged sectors of Philippine society, including: farmer-peasant, artisanal fisherfolk, workers in the formal sector and migrant workers, workers in the informal sector, indigenous peoples/cultural communities, women, differently-abled persons, senior citizens, victims of calamities/disasters, youth and students, children, and urban poor.
“Microfinance” is a credit and savings mobilization program exclusively for the poor to improve households’ asset base and expand access to savings, using viable alternative credit schemes and savings programs such as small loans, simplified procedures, group character loans, collateral-free arrangements, and other mechanisms.
“Capability building” refers to enhancing the viability and sustainability of microfinance institutions through activities like training, upgrading accounting/auditing, technical assistance, and monitoring of loans. The law expressly states it must not refer to equity investments or infusion of capital/seed funds; it precludes the grant of any loan or equity funds to the microfinance institution.
“Absolute poverty” is the condition of a household below the food threshold level; “Relative poverty” is the gap between the rich and the poor.
The SRA has: (1) social dimension (access to quality basic services), (2) economic dimension (asset reform and access to economic opportunities), (3) ecological dimension (sustainable development of productive resources), and (4) governance dimension (democratizing decision-making and management processes).
Examples of sector-specific flagships include: farmers/landless rural workers—agricultural development; fisherfolk—fisheries and aquatic resources conservation/management/development; indigenous peoples/communities—respect/protection/management of ancestral domains; workers in the informal sector—workers’ welfare and protection; urban poor—socialized housing; and other disadvantaged groups—CIDSS (Comprehensive Integrated Delivery of Social Services).
The law provides cross-sectoral flagships: institution-building and effective participation in governance; livelihood programs; expansion of micro-credit/microfinance services and capability building; and infrastructure buildup and development.
The NAPC is the National Anti-Poverty Commission created under the Office of the President. It serves as the coordinating and advisory body for the implementation of the SRA.
The Presidential Commission to Fight Poverty (PCFP), Social Reform Council (SRC), and Presidential Council for Countryside Development (PCCD) are abolished. The NAPC is the successor-in-interest of these bodies and exercises their powers and functions.
The President is Chairperson. The President appoints the Lead Convenor as head of the Secretariat (rank of Cabinet Secretary). There are vice chairpersons: one for government sector (designated by the President) and one for basic sectors (elected among basic sector representatives). Members include heads of listed government bodies, presidents of LGU leagues, and sector representatives nominated by sectoral councils and appointed by the President from the submitted nominees.
NAPC’s functions include coordinating national/local agencies and private sector for SRA implementation; coordinating with LGUs on conformity with the National Anti-Poverty Action Agenda; recommending responsive policy measures; ensuring meaningful basic sector representation; overseeing/monitoring/evaluating formulation and resource allocation; advocating fund mobilization; providing incentives to LGUs with counterpart resources; and submitting an annual report to Congress.
The PDTF is established and monitored by NAPC, funded from PAGCOR earnings plus appropriations by Congress and voluntary/grant/gift contributions. The President assigns administration to an existing government department/agency based on expertise, while NAPC is limited to monitoring utilization of PDTF earnings.
Earnings may be used for microfinance-related capacity building (consultancy/training), scholarships for microfinance staff and selected beneficiaries, community organizing, feasibility studies/researches, savings mobilization/incentives, information systems and socioeconomic mapping, legal/management support services, information dissemination of microfinance technology, and other approved activities supporting microfinance.
GFIs must provide savings and credit needs of the poor by coordinating with NAPC and PCFC to set up special credit windows and arrangements (including servicing SSIs) to promote the microfinance program. Private institutions may also set up similar credit windows.
If majority ownership of PCFC’s voting stocks passes to private investors exclusively qualified as NGOs, people’s organizations, or cooperatives, PCFC must register revised articles and by-laws with the SEC. Thereafter, PCFC becomes subject to laws governing private corporations, while continuing its main purpose of providing for the savings and credit needs of the poor.
NAPC initial operating fund: P100,000,000 sourced from the President’s Contingent Fund. PDTF: P4.5 billion for 10 years from the national government’s share in PAGCOR earnings (specified annual amounts). PCFC capitalization: P500,000,000 for four years, with a specified yearly breakdown, sourced from the national government’s share in PAGCOR earnings.