Amending the Fourth Paragraph of Regulation No. 9 of the Letter of Implementation No. 23 dated July 9, 1973 Implementing Presidential Decree No. 175 dated April 14, 1975

December 27, 1976

LETTER OF IMPLEMENTATION NO. 53

AMENDING THE FOURTH PARAGRAPH OF REGULATION NO. 9 OF THE LETTER OF IMPLEMENTATION NO. 23 DATED JULY 9, 1973 IMPLEMENTING PRESIDENTIAL DECREE NO. 175 DATED APRIL 14, 1975

WHEREAS, production loans obtained by farmer-members of Samahang Nayon are subject to a compulsory 5 per cent deduction as contribution to the Barrio Savings Fund;

WHEREAS, there is a need to decrease the 5 per cent Barrio Savings Fee to 3 per cent to reduce the financial burden on farmers;

WHEREAS, in order to ensure repayment, a portion of the Barrio Savings Fund must be utilized to guarantee the production loans obtained by Samahang Nayon members under any of the Supervised Credit Programs;

NOW, THEREFORE, pursuant to the provisions of Section 11 of Presidential Decree No. 175, the fourth paragraph of Regulation No. 9 of the Letter of Implementation No. 23 dated July 9, 1973, referring to the implementation of the Barrio Savings Fund Program, is hereby amended to read as follows:

"To implement the Barrio Savings Fund Program, the Agricultural Credit Administration, the rural banks, the Philippine National Bank, the Development Bank of the Philippines, the Land Bank, and other authorized financial institutions are hereby directed to automatically deduct from every production loan obtained by members of Samahang Nayon under any of the supervised credit programs, as amount equivalent to three per cent (3%) of such loan. Deduction shall be made upon release of the loan, and shall be held in a deposit account to constitute a Barrio Savings Fund in the name of the Samahang Nayon for the account of the member. Member who do not obtain production loans shall contribute to said Fund a minimum deposit of five pesos (P5.00) per month.

"The Barrio Savings Fund for the Samahang Nayon which is hereby constituted shall be utilized and disposed of in the manner specified as follows:

(a) Twenty-five per cent (25%) to purchase shares of stocks of and/or capitalize rural banks, development banks, or, credit cooperatives;

(b) Twenty-five per cent (25% to be used for, purposes as may be authorized by the Department of Local Government and Community Development through the Bureau; and

(c) Fifty per cent (50%) to guarantee the loans obtained by Samahang Nayon members under any of the Supervised Credit Programs.

PROVIDED, That the disposition of the Barrio Savings, Fund, as specified herein shall apply only to deposits made upon effectively of this amended LOI; PROVIDED, FURTHER, that unrestricted withdrawals by Samahang Nayon from Barrio Savings Fund deposits shall be allowed only in cases where the liquidity position of the depository is not endangered. Where such withdrawals may render a depository illiquid withdrawals may be allowed only in, proportion to the amount of loans actually repaid by Samahang Nayon members."

DONE in the City of Manila, this 27th day of December, in the year of Our Lord, Nineteen Hundred and Seventy-Six.