IMPLEMENTING GUIDELINES ON THE UTILIZATION OF PCIC PREMIUM SUBSIDY/DISCOUNT FOR PROGRAM FOR UNIFIED LENDING IN AGRICULTURE (PUNLA TRACK 1) PER PCIC BOARD RESOLUTION NO. 2016-064 DATED SEPTEMBER 27, 2016

 

I.       BACKGROUND

Program for Unified Lending in Agriculture (PUNLA)

In August 2016, the Agricultural Credit Policy Council (ACPC) has designed PUNLA, a Special Credit Facility for Marginal Farmers and Fisherfolk to address their financial needs for fast, convenient and affordable credit. The funds to be source from ACPC’s Agro-Industry Modernization Credit and Financing Program (AMCFP) shall be utilized for the implementation of a simplified and non-collateralized lending to intended beneficiaries of the agricultural loan program with interest of 6% per annum. The intended beneficiaries are farmers/fisherfolk listed under the RSBSA and/or “Juan Magsasaka’t Mangingisda” Data Base prepared by Department of Agriculture Information & Communications Technology Service (DA-ICTS)

The program will provide institutional and capacity building support to lending conduits to ensure the effective and sustainable delivery of credit to intended borrowers and will be implemented in the poorest provinces, as follows:

    1)    Apayao                             9) Lanao Del Norte  
    2)    Eastern Samar               10) Cotabato
    3)    Western Samar              11) Sarangani
    4)    Northern Samar             12) Maguindanao
    5)    Negros Oriental             13) Benguet
    6)    Zamboanga Del Norte   14) Bukidnon
    7)    Sulu                               15) Siquijor
    8)    Agusan del Sur 

The DA has approved this PUNLA and requested PCIC’s support. Accordingly, PCIC is providing premium subsidy/discount for the free insurance coverage of farms/farm investments,
subject of agricultural loans, of farmers and fisherfolk participating in PUNLA to be covered under PCIC’s RSBSA free crop insurance program.

Production Loan Easy Access (PLEA)

ACPC also implemented the pilot-testing of the Production Loan Easy Access (PLEA) for farmer-participants. The program has flexible repayment period based on borrower’s cash flow but not to exceed two years.  

PLEA will be implemented in whole country. The premium subsidy/discount for RSBSA listed farmers and fisherfolk will be fully subsidized under the PCIC’s RSBSA crop insurance program.

II.      GUIDELINES 

The following are the guidelines:

A.   UNDERWRITING POLICIES

1.   Type of Insurance Lines Eligible for                                                           

 PCIC Premium Subsidy/Discount      :    Crops (Rice, Corn, High Value), Livestock, Fisheries, and Non-Crop Agri -Asset   

2.   % of Premium Subsidy/Discount

                allowed in the Premium Cost          :    Full (100%) insurance premium cost                                                                                                                          

      3.   Premium Rates                            :  ►  Rice and Corn Crops – standard premium rate of 10.00% (as applied in fully subsidized program)

                                                                       ►  High-Value Crops – standard premium rate of 3.00%

                                                                       ►  Livestock – existing premium rates

                                                                       ►  Fisheries/Aquaculture – in accordance with the existing guidelines and procedures in determining the applicable premium rates. 

                                                                       ►  Non-Crop Agricultural Assets – existing premium rates

 4.    Amount of Cover (AC)                      :     PUNLA – maximum of P100,000 per farmer-borrower

                                                                       PLEA – maximum of P50,000 per farmer-borrower 

 5.    Other Conditions  

a.  Eligible farmer-participants or borrowers are recipients of PUNLA and PLEA credit programs in priority coverage areas;

b.  Farmer-participants of PUNLA and PLEA must be a borrower of any eligible Lending Conduits (LC) accredited by ACPC; (Note: List of LCs to be provided by ACPC)

c.   The farmer is not a recipient of any fully (100%) or partly subsidized insurance program;

d.  The farmer shall follow the Good Agricultural Practices (GAP), proper safety measures and/or applicable Package of Technology (POT) on the crop/livestock/aquaculture/properties, subject of production loan.

B.   UNDERWRITING PROCEDURES

1.    The ACPC accredited lending conduit/identified organization shall submit to the concerned PCIC Regional Office the list of eligible farmer-participants in the program.

2.    The PCIC shall review the List of Farmers to determine their eligibility and also to avoid duplication of insurance records.

3.    The PCIC shall conduct farmers’ orientation meeting and shall provide ACPC accredited lending conduit/identified organization with all underwriting and claims settlement forms.

4.   The ACPC accredited lending conduit/identified organization shall facilitate the preparation and submission of the required underwriting documents for insurance coverage, such as: group application for crop insurance, location sketch plan and standard farm plan and budget of farmer-participants.

5.    The PCIC shall review the submitted underwriting documents for completeness;

If not complete, return to ACPC/farmer-participants for proper action.

6.    PCIC to issue CIC/COC or policy to farmers, copy furnished the farmers and fishers group and ACPC. 

C.     CLAIMS PROCEDURES

Perform claims adjustment and settlement procedures in accordance with PCIC’s Operations Manual.

D.     SERVICE FEE

No provisions for service fee.

E.     PERIOD OF IMPLEMENTATION 

The PCIC Premium Subsidy/Discount shall be applied on insurance policies incepting from January 01, 2017 up to December 31, 2017.

 

Approved by:

ATTY. JOVY C. BERNABE

President

Philippine Crop Insurance Corporation