AGRICULTURE CREDIT GUARANTEE PROGRAMS

Administrative Order No. 225-A provides that government-owned and controlled corporations and government financial institutions shall allocate five percent (5%) of their 2007 surplus for palay and food production projects, and as contribution to the Agricultural Guarantee Fund Pool (AGFP). The AGFP shall be used to encourage partner lending institutions (PLIs) to lend to small farmers and fishers (SFF) or their organizations by providing guarantee coverage to their unsecured loans thereby mitigating the risks involved in lending to agri-agra sector.

SALIENT FEATURES OF THE GUARANTEE

I - ELIGIBLE ACTIVITIES

Agri-Agra credit shall refer to loans granted for the following activities:

  1. Agriculture and fisheries production including processing of fisheries and agri-based products and farm inputs;
  2. Acquisition of work animals, farm and fishery equipment and machinery;
  3. Acquisition of seeds, fertilizers, poultry, livestock, feeds and other similar items;
  4. Rehabilitation of farms resulting from calamities; and
  5. Agricultural and fish production including processing of agri and aqua-based products, farm inputs and/or processes across the food commodity value chain.
II - ELIGIBLE BORROWERS

Small farmers-refer to small crop growers and small livestock and poultry raisers as defined below:

  1. Small Crop Growers-refer to owner-cultivator, tenants, leaseholders, etc. who are tilling not more than five (5) hectares of agricultural lands (RA 6657).
  2. Small Poultry and Livestock Raisers-refer to those having the following maximum hog, poultry and livestock inventory at the time of accreditation by the PLI:
    • Poultry – 2,000 layers or 5,000 broilers;
    • Swine – 10 sows or 50 fatteners;
    • Goat/Sheep – up to 50 heads for meat and/or dairy;
    • Cattle – 10 fatteners or 5 breeders;
    • Dairy – 10 milking cows/carabaos

Small Fishers-refer to the following:

  1. Coastal Fishermen – own or operate a fishing boat, including paraphernalia with total weight of not more than three (3) gross tons and conduct fishing activities within fifteen (15) kilometers from the shoreline.
  2. Fishpond Operators – owner/operator of fishpond(s) of not more than five (5) hectares including those under fishpond lease agreement (FLA).
  3. Fishcage Operators – owner/operator of fish cage(s) with total area of not more than 400 square meters.
  4. Those engaged in aquaculture, which covers all forms of raising and culturing fish, shellfish, seaweed production, and other fishery species in brackish and marine areas of not more than five (5) hectares.
III - ELIGIBLE LOANS FOR GUARANTEE COVERAGE

Unsecured loans of eligible borrowers. If secured partly by real estate mortgage (REM) or chattel mortgage (CM) or deposit hold-out in favor of the partner lending institution, only the unsecured portion which shall be not less than 50% of the loan shall be eligible for guarantee coverage.

IV - ELIGIBLE LENDING INSTITUTIONS
  1. BANKS (Universal Banks, Commercial Banks, Rural Banks, Cooperative Banks, Thrift Banks)
    1. Satisfactory credit standing with creditors, if any
    2. CAMELS Rating of at least “3”
    3. Past Due Ratio net of valuation reserve, of not more than 15%
    4. At least two-year track record in lending
    5. Capital Adequacy Ratio of at least 10%
    6. Adequate Reserve Requirement
    7. Profitable on the year preceding the application and as of the time of application for guarantee line

  2. COOPERATIVES
    1. Registered with Cooperative Development Authority (CDA)
    2. Satisfactory credit standing with creditors, if any
    3. Past Due Ratio net of valuation reserve of not more than 25%
    4. At least two-year track record in lending
    5. Risk-asset ratio (for credit cooperative) of not less than 10%
    6. Complete part or full-time core management team
    7. Profitable on the year preceding the application and as of the time of application for guarantee line.

  3. FARMERS’/PEOPLE’S ORGANIZATIONS OTHER THAN COOPERATIVES
    1. Registered with a registering entity (e.g. SEC, NIA, etc.);
    2. Operational and with satisfactory credit standing with its creditors, if any or with supervising government agencies/ entities such as NIA, DOLE, DAR, etc;
    3. With functioning Board of Directors or its equivalent, and presence of core management team (e.g. manager, bookkeeper and treasurer or officially designated officers to manage the lending program);
    4. Positive net worth on the year preceding the application and as of the time of application for guarantee line;
    5. With lending policies and guidelines and with basic recording system (e.g. loan disbursement and collection systems, etc.);
    6. At least two-year track record in lending;
    7. Past due ratio net of valuation reserve, of not more than 25%.

  4. NON-GOVERNMENT ORGANIZATIONS
    1. Registered with Securities and Exchange Commission (SEC)
    2. Satisfactory credit standing with creditors, if any
    3. Past Due Ratio net of valuation reserve of not more than 25%
    4. At least two-year track record in lending
    5. Complete core management team
    6. Net surplus on the year preceding the application and as of the time of application for guarantee line.

  5. CORPORATIONS THAT LEND TO SFF
    1. Registered with the Securities and Exchange Commission (SEC)
    2. Must have authority to engage in lending activity from appropriate government authority
    3. Certificate of No Derogatory Record from SEC
    4. No ownership and/or labor dispute for the past three (3) years
    5. Past due ratio net of valuation reserve, of not more than 15%
    6. Profitable on the year preceding the application and as of the time of application for guarantee line
    7. At least 60% Filipino-owned
    8. Debt-equity of not more than 80:20
    9. At least two-year track record in lending
V - DOCUMENTARY REQUIREMENTS FOR GUARANTEE LINE APPLICATION
If file download does not proceed when you click on “Download here”:
  1. Hover on “Download here” and hit right-click on your mouse, select “Save Link As…” to download the file, or;
  2. Click on “here” to open the file on another tab, click on “File” then hover on “Download” to select and click on the file type to download your copy.
Pre-Approval Requirements:
  • Request for Guarantee Line (original);
    [ Download here or here ]
  • Secretary’s Certificate or Board Resolution granting authority to apply for a guarantee line and designating the authorized signatory(ies) (original);
  • ID of authorized signatory(ies) (photocopy);
  • Specimen Signature of Authorized Signatory(ies) (original);
    [ Download here or here ]
  • Three (3) years Audited Financial Statements stamp received by BIR (photocopy);
  • Latest Interim Financial Statement, if applicable, (photocopy);
  • Schedule 11a1 (photocopy);
  • Declaration of Loan Portfolio for the past three years and interim period (photocopy);
    [ Download here or here ]
  • Business Information Sheet and/or General Information Sheet (original or photocopy);
    [ Download here or here ]
  • SEC Registration (photocopy);
  • Certification of CAMELS/SAFr Rating issued by the President and Compliance Officer (original and notarized);
    [ Download here or here ]
  • Report on the Computation of Risk-based CAR (photocopy);
  • Duly signed Personal Data Sheet of Principal Officers with photos. TIN no. and birthdates should also be stated (original or photocopy);
    [ Download here or here ]
  • Authorization for PHILGUARANTEE-AGG to secure relevant information from creditors (original);
    [ Download here or here ]
  • Projected Loan Releases (original);
    [ Download here or here ]
  • Lending policies or guidelines (photocopy).
Post-Approval Requirements:
  1. Guarantee Line Confirmation (GLC) – Conformed by Authorized Signatories based on Board Resolution
  2. Guarantee Agreement – Signed on all pages by Authorized Signatories based on Board Resolution
If file download does not proceed when you click on “Download here”:
  1. Hover on “Download here” and hit right-click on your mouse, select “Save Link As…” to download the file, or;
  2. Click on “here” to open the file on another tab, click on “File” then hover on “Download” to select and click on the file type to download your copy.
Pre-Approval Requirements:
  • Request for Guarantee Line (original);
    [ Download here or here ]
  • Secretary’s Certificate or Board Resolution granting authority to apply for a guarantee line and designating the authorized signatory(ies) (original);
  • ID of authorized signatory(ies) (photocopy);
  • Specimen Signature of Authorized Signatory(ies) (original);
    [ Download here or here ]
  • Three (3) years Audited Financial Statements stamp received by BIR (photocopy);
  • Latest Interim Financial Statement, if applicable, (photocopy);
  • Declaration of Loan Portfolio for the past three years and interim period (photocopy);
    [ Download here or here ]
  • Business Information Sheet and/or General Information Sheet (original or photocopy);
    [ Download here or here ]
  • CDA Registration (photocopy);
  • Duly signed Personal Data Sheet of Principal Officers with photos. TIN no. and birthdates should also be stated (original or photocopy);
    [ Download here or here ]
  • Authorization for PHILGUARANTEE-AGG to secure relevant information from creditors (original);
    [ Download here or here ]
  • Projected Loan Releases (original);
    [ Download here or here ]
  • Lending policies or guidelines (photocopy).
Post-Approval Requirements:
  1. Guarantee Line Confirmation (GLC) – Conformed by Authorized Signatories based on Board Resolution
  2. Guarantee Agreement – Signed on all pages by Authorized Signatories based on Board Resolution
If file download does not proceed when you click on “Download here”:
  1. Hover on “Download here” and hit right-click on your mouse, select “Save Link As…” to download the file, or;
  2. Click on “here” to open the file on another tab, click on “File” then hover on “Download” to select and click on the file type to download your copy.
Pre-Approval Requirements:
  • Request for Guarantee Line (original);
    [ Download here or here ]
  • Secretary’s Certificate or Board Resolution granting authority to apply for a guarantee line and designating the authorized signatory(ies) (original);
  • IDs of authorized signatory(ies) (photocopy);
  • Specimen Signature of Authorized Signatory(ies) (original);
    [ Download here or here ]
  • Three (3) years Audited Financial Statements stamp received by BIR (photocopy);
  • Latest Interim Financial Statement, if applicable, (photocopy);
  • Declaration of Loan Portfolio for the past three years and interim period (photocopy);
    [ Download here or here ]
  • Business Information Sheet and/or General Information Sheet (original or photocopy);
    [ Download here or here ]
  • SEC Registration (photocopy);
  • Duly signed Personal Data Sheet of Principal Officers with photos. TIN no. and birthdates should also be stated (original or photocopy);
    [ Download here or here ]
  • Authorization for PHILGUARANTEE-AGG to secure relevant information from creditors (original);
    [ Download here or here ]
  • Projected Loan Releases (original);
    [ Download here or here ]
  • Lending policies or guidelines (photocopy).
Post-Approval Requirements:
  1. Guarantee Line Confirmation (GLC) – Conformed by Authorized Signatories based on Board Resolution
  2. Guarantee Agreement – Signed on all pages by Authorized Signatories based on Board Resolution
If file download does not proceed when you click on “Download here”:
  1. Hover on “Download here” and hit right-click on your mouse, select “Save Link As…” to download the file, or;
  2. Click on “here” to open the file on another tab, click on “File” then hover on “Download” to select and click on the file type to download your copy.
Pre-Approval Requirements:
  • Request for Guarantee Line (original);
    [ Download here or here ]
  • Secretary’s Certificate or Board Resolution granting authority to apply for a guarantee line and designating the authorized signatory(ies) (original);
  • ID of authorized signatory(ies) (photocopy);
  • Specimen Signature of Authorized Signatory(ies) (original);
    [ Download here or here ]
  • Three (3) years Audited Financial Statements stamp received by BIR (photocopy);
  • Latest Interim Financial Statement, if applicable, (photocopy);
  • Declaration of Loan Portfolio for the past three years and interim period (photocopy);
    [ Download here or here ]
  • Business Information Sheet and/or General Information Sheet (original or photocopy);
    [ Download here or here ]
  • SEC Registration (photocopy);
  • Certification of No Derogatory Record from the Securities and Exchange Commission (original or photocopy);
  • Certification of No Ownership and/or labor dispute for the past three (3) years (original or photocopy);
  • Certification of Authority to Engage in Lending Activity from the Securities and Exchange Commission (original or photocopy);
  • Duly signed Personal Data Sheet of Principal Officers with photos. TIN no. and birthdates should also be stated (original or photocopy);
    [ Download here or here ]
  • Authorization for PHILGUARANTEE-AGG to secure relevant information from creditors (original);
    [ Download here or here ]
  • Projected Loan Releases (original);
    [ Download here or here ]
  • Lending policies or guidelines (photocopy).
Post-Approval Requirements:
  1. Guarantee Line Confirmation (GLC) – Conformed by Authorized Signatories based on Board Resolution
  2. Guarantee Agreement – Signed on all pages by Authorized Signatories based on Board Resolution
FARMERS’/PEOPLE’S ORGANIZATIONS
If file download does not proceed when you click on “Download here”:
  1. Hover on “Download here” and hit right-click on your mouse, select “Save Link As…” to download the file, or;
  2. Click on “here” to open the file on another tab, click on “File” then hover on “Download” to select and click on the file type to download your copy.
Pre-Approval Requirements:
  • Request for Guarantee Line (original);
    [ Download here or here ]
  • Secretary’s Certificate or Board Resolution granting authority to apply for a guarantee line and designating the authorized signatory(ies) (original);
  • ID of authorized signatory(ies) (photocopy);
  • Specimen Signature of Authorized Signatory(ies) (original);
    [ Download here or here ]
  • Three (3) years Audited Financial Statements stamp received by BIR (photocopy);
  • Latest Interim Financial Statement, if applicable, (photocopy);
  • Declaration of Loan Portfolio for the past three years and interim period (photocopy);
    [ Download here or here ]
  • Business Information Sheet and/or General Information Sheet (original or photocopy);
    [ Download here or here ]
  • SEC Registration (photocopy);
  • Duly signed Personal Data Sheet of Principal Officers with photos. TIN no. and birthdates should also be stated (original or photocopy);
    [ Download here or here ]
  • Authorization for PHILGUARANTEE-AGG to secure relevant information from creditors (original);
    [ Download here or here ]
  • Projected Loan Releases (original);
    [ Download here or here ]
  • Lending policies or guidelines (photocopy).
Post-Approval Requirements:
  1. Guarantee Line Confirmation (GLC) – Conformed by Authorized Signatories based on Board Resolution
  2. Guarantee Agreement – Signed on all pages by Authorized Signatories based on Board Resolution
VI - PERCENTAGE OF GUARANTEE COVERAGE
The guarantee cover shall be up to 85% of the principal balance of the loan at the time of claim but not to exceed the amount of credit ceiling per commodity.
VII - LOAN CEILING, GUARANTEE FEE AND GUARANTEE PERIOD

The PLI shall pay the guarantee fee based on the amount of the loan as indicated in the PN. The guarantee fee rates are provided herein, taking into consideration the following:

  1. If the loan is covered by PCIC insurance – 50% discount
  2. If the loan is granted to an agrarian reform beneficiary (ARB) – 50% discount
  3. If the loan is PCIC insured and the borrower is an ARB – 75% discount

ACTIVITY GUARANTEE PERIOD GUARANTEE FEE RATE MAXIMUM ALLOWABLE LOAN
FOR COVERAGE
AMOUNT UNIT
CROP PRODUCTION
Ampalaya 7 months 1.20% 251,050.00 Per hectare
Baguio Beans 3 months 0.50% 149,880.00 Per hectare
Bell Pepper 12 months 2.00% 300,360.00 Per hectare
Black Pepper 12 months 2.00% 30,000.00 Per hectare
Brocolli 7 months 1.20% 86,000.00 Per hectare
Cabbage 6 months 1.00% 208,824.00 Per hectare
Carrots 4 months 0.70% 210,050.00 Per hectare
Cassava 12 months 2.00% 96,665.00 Per hectare
Cauliflower 3 months 0.50% 213,122.00 Per hectare
Celery 7 months 1.20% 90,000.00 Per hectare
Corn (White) 6 months 1.00% 70,850.00 Per hectare
Corn (Yellow) 6 months 1.00% 76,000.00 Per hectare
Cucumber 6 months 1.00% 252,039.50 Per hectare
Eggplant 12 months 2.00% 358,025.00 Per hectare
Garlic 4 months 0.70% 193,240.00 Per hectare
Ginger 10 months 1.70% 367,300.00 Per hectare
Honeydew 7 months 1.20% 60,000.00 Per hectare
Hot Pepper 12 months 2.00% 337,875.00 Per hectare
Lettuce 7 months 1.20% 75,000.00 Per hectare
Malunggay (Cuttings) 7 months 1.20% 70,000.00 Per hectare
Malunggay (Direct Seeding) 18 months 3.00% 178,350.00 Per hectare
Melon 7 months 1.20% 60,000.00 Per hectare
Mongo 7 months 1.20% 22,000.00 Per hectare
Mushroom 7 months 1.20% 40.00 Per fruiting bag
Okra 7 months 1.20% 68,000.00 Per hectare
Onion (Red) 6 months 1.00% 199,400.00 Per hectare
Onion (White) 6 months 1.00% 208,250.00 Per hectare
Palay (Hybrid) 6 months 1.00% 97,780.00 Per hectare
Palay (Inbred) 6 months 1.00% 83,930.00 Per hectare
Papaya 7 months 1.20% 112,000.00 Per hectare
Patani 7 months 1.20% 40,000.00 Per hectare
Patola 7 months 1.20% 46,000.00 Per hectare
Peanut 7 months 1.20% 30,000.00 Per hectare
Pechay 7 months 1.20% 30,000.00 Per hectare
Pineapple(Plant) 23 months 3.85% 298,000.00 Per hectare
Pineapple(Ratoon) 20 months 3.35% 230,000.00 Per hectare
Pole Sitao (Stringbean) 4 months 0.70% 153,519.00 Per hectare
Potato 1 year 2.00% 565,425.00 Per hectare
Radish 7 months 1.20% 50,000.00 Per hectare
Sayote 7 months 1.20% 150,000.00 Per hectare
Shallot 7 months 1.20% 35,000.00 Per hectare
Snap Beans 3 months 0.50% 149,880.00 Per hectare
Sorghum 7 months 1.20% 35,000.00 Per hectare
Soy Beans 4 months 0.70% 77,740.00 Per hectare
Squash 7 months 1.20% 60,000.00 Per hectare
Sugarcane (Plant) 12 months 2.00% 251,798.00 Per hectare
Sugarcane (Ratoon) 12 months 2.00% 194,070.00 Per hectare
Sunflower 7 months 1.20% 33,000.00 Per hectare
Sweet Peas 7 months 1.20% 100,000.00 Per hectare
Sweet Pepper 7 months 1.20% 260,000.00 Per hectare
Sweet Potato 4 months 0.70% 62,880.00 Per hectare
Taro (Gabi) 7 months 1.20% 35,000.00 Per hectare
Tomato 7 months 1.20% 140,000.00 Per hectare
Turnips 7 months 1.20% 40,000.00 Per hectare
Upo 7 months 1.20% 40,000.00 Per hectare
Watermelon 7 months 1.20% 48,000.00 Per hectare
Yam (Ube) 12 months 2.00% 371,590.00 Per hectare
FISHERIES PRODUCTION
Bangus (Fishpond) 8 months 1.35% 100,000.00 Per hectare
Bangus (Cages) 8 months 1.35% 250,000.00 Per 400 sq.m.
Tilapia (Fishpond) 7 months 1.20% 310,000.00 Per hectare
Tilapia (Cages) 7 months 1.20% 250,000.00 Per 400 sq.m.
Catfish (Fishpond) 8 months 1.35% 100,000.00 Per hectare
Catfish (Cages) 8 months 1.35% 250,000.00 Per 400 sq.m.
Seaweed (Fixed-bottom Monoline) 7 months 1.20% 52,000.00 Per hectare
Seaweed (Floating Long-line) 7 months 1.20% 65,000.00 Per hectare
POULTRY PRODUCTION
Layer 20 months 3.35% 86,000.00 Per 100 birds
Broiler 3 months 0.50% 10,000.00 Per 100 birds
LIVESTOCK PRODUCTION
Goat/Sheep (Breeding) 12 months 2.00% 20,000.00 Per animal
Goat/Sheep (Fattening) 7 months 1.20% 1,000.00 Per animal
Hog (Breeding) 14 months 2.35% 80,000.00 Per animal
Hog (Fattening) 6 months 1.00% 8,000.00 Per animal
Cattle (Fattening) 8 months 1.35% 50,000.00 Per animal
Cattle (Breeding) 11 months 1.85% 50,000.00 Per animal
MULTICROP/OTHER SHORT-TERM CROPS OR COMMODITIES
Multicrop/Other Short-term Crops or commodities (e.g. vegetables, integrated farming, etc.) 7 months 1.20% 100,000.00 Per hectare
SHORT-TERM LOANS EXTENDED FOR LONG GESTATING CROPS
Cacao 1 year 2.00% 86,000.00 Per hectare
Coffee 1 year 2.00% 72,000.00 Per hectare
Mango (per hectare) 6 months 1.00% 350,000.00 100 trees per hectare
Mango (per tree) 6 months 1.00% 3,500.00 Per tree
Banana 1 year 2.00% 50,000.00 Per hectare
Coconut 1 year 2.00% 20,000.00 Per hectare
Oil Palm 1 year 2.00% 38,000.00 Per hectare

  1. Enrolment for guarantee coverage of short-term loans extended for long gestating crops production such as coconut, banana, coffee, cocoa, mango, and oil palm and the like shall be allowed provided that:
    1. The objects of financing are existing and mature (fruit-bearing trees/plants); and
    2. Loan maturity is not more than one (1) year.
  2. Relative to the Guarantee Period, the term “Months” shall be understood to consist of thirty (30) days each, and “Year”, of three hundred sixty five (365) days.
  3. Guarantee fees for enrolment in excess of the loan ceiling shall not be refunded.

IX - RISK WEIGHT

All loans extended by partner-banks that are guaranteed by AGFP shall carry zero percent (0%) risk weight pursuant to BSP Circular 1084, Series 2020.

X - RISKS AND EVENTS OF DEFAULT COVERED BY THE GUARANTEE

The guarantee shall cover all risks, from losses due to non-payment of loans including those that are caused by the following, but not limited to:

  • natural calamities (such as typhoons, floods, etc.)
  • pests and diseases
  • market aberrations

However, fraud or wilful misrepresentation on the guarantee coverage and guarantee claims on the part of the PLI shall not be covered and which may be used as basis for termination or revocation of guarantee line.