AMENDMENTS TO THE IMPLEMENTING GUIDELINES OF ADMINISTRATIVE ORDER NO. 23

WHEREAS, on the 26th of May 2008, President Gloria Macapagal-Arroyo
issued Administrative Order No. 225-A, amending Administrative Order No.
225, mandating government-owned and controlled corporations and
government financial institutions to allocate five percent (5%) of their
2007 surplus for projects in rice and food production and as
contribution to an Agricultural Guarantee Fund Pool;

WHEREAS, on the 7th of July 2008, the Department of Agriculture, upon coordination with the Land Bank of the Philippines,
issued D.A. Administrative Order No. 23, series of 2008 covering the
implementing guidelines, mechanics and administrative arrangements of
the Agricultural Guarantee Fund Pool;

WHEREAS, there is a need to amend D.A. A.O. No. 23 to harmonize its
provisions with the Implementing Rules and Regulations decided upon and
approved by the Agricultural Guarantee Fund Governing Board;

NOW, THEREFORE, I, ARTHUR C. YAP, SECRETARY OF THE DEPARTMENT OF AGRICULTURE, do hereby order:

SECTION 1. Section 3.3.a of D.A. A.O. No. 23 is hereby amended as follows:

“Program Management Committee (PMC) – to be composed of three representatives from the Department of Agriculture to be designated by its Secretary and two representatives from the Land Bank of the Philippines
(LANDBANK) to be designated by its President and CEO, shall be chaired
by the representative from the LANDBANK and co-chaired by a DA
Representative. The PMC shall execute the Fund Board ’s decisions and
render supervision over the PMO staff.”

SECTION 2. Section 4.1 Eligible Institutions is hereby amended as follows:

“Institutions eligible for guarantee coverage are the credit conduits that have good track record in lending/financing such as: (a) government financial institutions and corporations engaged in and with mandate on extending credit
and/or financing to small farmers; (b) private financial institutions
such as cooperative rural banks and rural banks, thrift banks,
cooperatives, farmer’s organizations and non-government organizations
and (c) Small and medium enterprises and large corporations. The
Governing Board shall establish the eligibility criteria for qualified
institutions.

SECTION 3. Section 4.2 of D.A. A.O. No. 23 is hereby amended as follows:

The AGFP shall extend guarantee cover to eligible
loan/financing exposure of the eligible institution of up to 85% of the
loan/financing principal. The guarantee shall cover all risks as defined
by the Fund Board. Such risks shall include weather related risks,
risks due to pests and diseases, and other risks except claims involving
fraud on the part of the conduits/borrowers.

SECTION 4. Section 6 of D.A. A.O. No. 23 is hereby amended as follows:

“This Guidelines shall be effective upon issuance hereof and shall remain in effect for five years or extended for another five years as agreed by the DA
and the Land Bank. The Agricultural Guarantee Fund Governing Board
shall formulate the necessary Implementing Rules and Regulations. The
Implementing Guidelines and the Implementing Rules and Regulations may
be revised or amended by the Fund Governing Board.”

SECTION 5. All other provisions of D.A. A.O. No. 23, series of 2008, shall remain valid and existing.

SECTION 6. This Administrative Order shall take effect immediately.

Adopted: 22 Sept. 2008

(SGD.) ATTY. ARTHUR C. YAP
Secretary