Creation and Scope of the Administration
- Establish Agricultural Credit and Cooperative Financing Administration ("Administration") as a body corporate.
- Administration implements the declared policy to fullest extent.
- Principal office in Manila; may have representatives elsewhere.
General Powers of the Administration
- Adopt corporate seal, enter contracts, lease/own property, sue and be sued.
- Make annual report to Congress including recommendations.
- Make regulations, appoint officers and employees.
- Manage expenditures for operations and publications.
- Acquire and hold assets and incur liabilities as necessary.
Special Powers of the Administration
- Establish regional, provincial, local offices.
- Formulate policies and approve loans to small farmers and cooperatives.
- Operate farmers’ terminal markets or producers’ exchanges with storage facilities.
- Control issuance of warehouse receipts to facilitate credit.
- Supervise MSA-PHILCUSA Aid to cooperatives.
- Promote cooperative education, diversified agriculture.
- Collect agricultural statistics.
- Float debentures to supplement funds if Congress fails to allocate enough.
Board of Governors
- Consists of Chairman and six members appointed by the President with Commission on Appointments consent.
- Terms of three years with staggered initial appointments.
- Vacancies filled for unexpired term; no courtesy resignation required on presidential change.
Powers and Duties of the Chairman (Administrator)
- Chief executive of Administration.
- Must have administrative ability, agricultural financing experience.
- Prepares Board agenda, executes approved policies.
- Supervises operations and internal administration.
- May delegate administrative responsibilities.
Administrative Structure
- Assistant Administrator (as needed), General Counsel, regional supervisors (up to seven), division chiefs.
- Provincial directors in charge of rural community operations.
- Loan supervisors to maintain borrower contact.
- Secretary of Justice is ex officio legal adviser; appoints General Counsel.
- Auditor General is ex officio auditor; quarterly financial reports required.
Revolving Fund
- P100 million revolving fund appropriated by Congress.
- MSA-PHILCUSA contributions included.
- President can allocate unexpended collections from related government fees and charges.
- Administration may float debentures with government guarantee.
Loaning Activities
- Stimulate cooperative development.
- Remove credit shortage hindrance.
- Free farmers from predatory money lenders.
- Cooperate with private financial institutions for stable borrowers.
Definitions
- Farmers cooperative association: voluntary, democratic business organization among farmers for marketing and buying supplies.
- Small farmer: individual exclusively using family labor engaged in agriculture.
Credit to Small Farmers
- Loans based on productive capacity, not land title or collateral.
- Maximum loan of P2,000.
- Loans for production inputs: fertilizer, seed, feed, work animals, equipment, livestock, poultry.
- Loan security primarily production-based; item pledged if not consumed.
- Farmer compliance with proven farming practices required.
Terms of Loans
- Terms to suit repayment ability linked to production cycle and income.
- Extensions granted for uncontrollable causes (pests, weather).
- Production pledged as primary security with safeguards.
- Marketing agreements may be required as condition of loan.
- Legal remedies (injunction, specific performance) available if marketing contract breached.
Loans to Cooperatives
- Loans granted if cooperative meets organizational, management, and business standards.
- Must be SEC-registered and comply with cooperative laws.
- Facility loans may cover up to 100% if built of durable materials and amortized within 10 years.
- Otherwise, loans limited to 80% of facility value.
- Purchases to be reasonable price; loans only if no suitable existing facilities available at reasonable cost.
Loan Interest and Fees
- Interest not more than 8% per annum.
- 5% insurance fee may be charged at loan grant.
Personal Loans from Cooperatives
- Cooperatives may lend to good-standing members from Administration-advanced funds.
- Loans up to 80% of stored produce market value (warehouse receipt collateral).
- Loans up to 60% of expected current crop value, capped at 150% of previous stored crop.
Transfer of Cooperatives Administration Office Functions
- Transfer to Administration of personnel, powers, funds related to cooperative marketing promotion.
Obligations and Guarantees
- Administration obligations secured by its assets and guaranteed by Philippine government.
- Government liable to pay if Administration defaults and succeeds to holders' rights.
Tax Exemptions
- Notes, bonds, debentures, obligations exempt from taxes except inheritance and gift taxes.
Support from Government Agencies
- Central Bank and Rehabilitation Finance Corporation to provide loans and technical assistance on Board request.
Free Services for Loan Applicants
- Justices of the peace to administer oaths and acknowledgments free for loans up to P500.
- Registers of deeds to accept related instrument registrations free for loans up to P500.
Penal Provisions
- Fines and imprisonment for justices or registers who unlawfully exact fees.
- Prohibition on Administration officers/employees becoming guarantors for loans; violation leads to removal, fines, imprisonment.
- No fees or commissions for loan procurement; violators fined and imprisoned.
- False information in loan application punishable by fines and imprisonment; officials allowing falsity liable.
- Prohibition on speculation in agricultural commodities or cooperative stock by Administration members; penalties apply.
- Confidentiality breach of information by cooperative officials punishable.
Miscellaneous Provisions
- Invalidity of any provision does not affect remainder of Act.
- Repeal of inconsistent banking and financial laws.
- Effectivity upon approval.