Revised format of the Consolidated Report on the Utilization of Loanable Funds Generated Which Were Set Aside for Agrarian Reform Credit/Other Agricultural Credit

CIRCULAR LETTER Series of 1999

Effective with the report as of March 31, 1999, banks shall use the attached revised format of the Consolidated Report on the Utilization of Loanable Funds Generated Which Were Set Aside for Agrarian Reform Credit/Other Agricultural Credit on the mandatory allocation of funds for agrarian reform and agricultural credit under P.D. No. 717. The revised format incorporates the allowable alternative means of compliance enumerated in Circular No. 190 dated February 16, 1999, namely, (a) development loans incentive under R.A. No. 7721; (b) loans for high-value crop projects under R.A. No. 7900; and (c) unused agri-agra funds to be utilized for socialized and low-cost housing under R.A. No. 7835, as well as any alternative investment in government securities that may be allowed or declared eligible in the future.

For purposes of the report, the following definitions, shall apply:

Educational institutions shall refer to all educational establishments duly authorized by or with permit to operate from the Department of Education, Culture and Sports, or created by special laws or charters.

Cooperatives shall refer to duly registered associations of persons with a common bond of interest who have voluntarily joined together to achieve a lawful common social or economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles, as defined in R.A. No. 6938 (Cooperative Code of the Philippines).

Hospital shall refer to a place devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment and care of individuals suffering from illness, disease, injury or deformity, or in need of obstetrical or other medical and nursing care.

It also refers to an institution, building, or place where there are installed beds, or cribs, or bassinets for twenty-four (24) hour use or longer by patients in the treatment of diseases, injuries deformities or abnormal physical and mental state, maternity cases, and all institutions such as those for convalescence, sanitorial or sanitarial care, infirmaries, nurseries, dispensaries and such other names by which they may be designated.

Medical services shall refer to various services like general treatment, physical examination, consultation, medication, dressing, suturing, surgical operation, etc., all pertaining to or dealing with the healing art or the science of medicine, with license to operate from the Department of Health.

Socialized housing refers to housing programs and projects covering houses and lots or home lots only undertaken by the Government or the private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberalized terms on interest payments, and such other benefits in accordance with the provisions of R.A. No. 7279 (Urban Development and Housing Act).

Low-cost housing refers to socialized housing which are housing loans not exceeding P180,000 and economic housing which are housing loans in excess of P180,000 but not more than P375,000, as prescribed under existing guidelines of the Housing and Urban Development Coordinating Council (HUDCC) for the implementation of various government housing programs, or in such other amounts which HUDCC may prescribe in the future for said housing loans.

Economic and socialized housing refers to housing units which are within the affordability level of the average and low-income earners which is thirty percent (30%) of the gross family income as determined by the National Economic Development Authority from time to time. It also refers to the government-initiated sites and services development and construction of economic and socialized housing projects in depressed areas.

Local government unit refers to provinces, cities, municipalities and any other political subdivision created by law enacted by Congress and to baranggays created by ordinance passed by the Sanggunian Panlalawigan or the Sanggunian Panlungsod that are located within its territorial jurisdiction, subject to such limitations and requirements prescribed in R.A. No. 7160 (Local Government Code of 1991).

High-value crops shall refer to crops that can be optimally and sustainably produced in key commercial crop production areas identified by the Department of Agriculture and which can generate revenue higher than that of traditional crops (which refer to rice, corn coconut and sugar). Such high-value crops include, but are not limited to: coffee and cacao, fruit crops (citrus, cashew, guyabano, papaya, mango, pineapple, strawberry, jackfruit, rambutan, durian, mangosteen, guava, lanzones and watermelon), root crops (potato and ube), vegetable crops (asparagus, broccoli, cabbage, celery, carrots, cauliflower, radish, tomato, bell pepper and patola), legumes, pole sitao (snap beans and garden pea), spices and condiments (black pepper, garlic, ginger and onion), and cutflower and ornamental foliage plants (chrysanthemum, gladiolus, anthurium, orchids and statice).

Farmers' associations/organizations shall refer to farmers' cooperatives, associations or corporations duly registered with appropriate government agencies and which are composed primarily of small agricultural producers, farmers, farm workers and other agrarian reform beneficiaries who voluntarily join together to form business enterprises which they themselves, own, control and patronize.

A bank participating in the High Value Crop Development Program shall refer to the Land Bank of the Philippines, the Development Bank of the Philippines and any qualified lending institution which has been accredited/selected as provided in the Implementing Rules and Regulations of R.A. No. 7900 (Joint Administrative Order No. 1, series of 1996) of the Department of Agriculture dated April 23, 1996.

Regarding the alternative compliance under R.A. No. 7835 which states that "all unused agri-agra allocation funds of banks in the preceding year shall be invested in socialized and low-cost housing: Provided That the utilized portion was solely devoted to agricultural and agrarian reform credit", this alternative shall be relevant only in respect of banks with undercompliance as of the end of a calendar year which banks may correct in the first quarter of the following year. For this purpose, banks shall accomplish Schedule F of the revised format of the Consolidated Report on the Utilization of Loanable Funds Generated Which Were Set Aside for Agrarian Reform Credit/Other Agricultural Credit which should be submitted with the first quarter report.

The deadline for submitting the report shall remain at fifteen (15) banking days from end of the reference quarter.

ALBERTO V. REYES Deputy Governor