1. BRIEFER/UPDATES ON THE UTILIZATION OF THE AGRICULTURAL COMPETITIVENESS ENHANCEMENT FUND (ACEF) Department of Agriculture Office of the Secretary

2. The Agricultural Competitiveness Enhancement Fund Part I

3. The Agricultural Competitiveness Enhancement Fund A Special Fund (Fund 183) created under RA 8178 out of the proceeds of MAV in-quota importation; Intended to support projects that will make the agri/fisheries sectors globally competitive; RA 8178 of 1996 expired last Dec. 2007; RA 9496, or the law extending ACEF up to 2015 was enacted last 28 Feb. 2008.

4. Source of ACEF The in-quota tariff revenues from the importation of agricultural products within the MAV; and Collections from repayments from loan beneficiaries. (started in 2 nd qtr of 2008)

5. The ACEF as extended, is programmed to start 2008 and will end in 2015. Effectivity period of the ACEF Up to 2015, after which the collection of duties from the MAV and the setting aside of the amount collected for the purposes shall terminate; Any remaining balance(s) at the date of expiration of the Fund shall not revert to the General Fund but shall continue to be used for the purpose for which it was collected and set aside.

6. Intended Beneficiaries of ACEF Eligible project proponents for ACEF assistance would include any of the following: Filipino farmers and fisherfolk; Micro, small and medium scale enterprises (MSMEs) engaged in agriculture, aquaculture, and fisheries sectors; Agriculture and fishery cooperatives and other entrepreneurs engaged in economic enterprises related to agriculture and fisheries; Local Government Units (LGUs) and other implementing bureaus and attached agencies and corporations under DA; and State Universities and Colleges (SUCs).

7. Fund Allocation The Fund shall be set aside and earmarked as follows: Seventy percent (70%) for agri-based production and post-production and processing activities ( including, but not limited to, new export industries and agri-related infrastructure and equipment to achieve modern agricultural practices) ; for public information and promotion activities for technical assistance and feasibility studies grant. Maximum of ten percent (10%) of this will be earmarked for the administrative expenses of the ACEF enabling committees/secretariat; Twenty percent (20%) for research and development and commercialization of such, including the upgrading of research facilities of qualified state universities and colleges; and Ten percent (10%) for the funding of a comprehensive scholarship program for agriculture, forestry, fisheries, and veterinary medicine education.

8. Activities that can be funded under ACEF The ACEF shall be set aside and earmarked: (a)for the protection of farmers against unfair trade practices such as: Smuggling; dumping of agricultural products; or other similar acts of unfair trade practices (b)for the increased productivity of farmers by providing the necessary support services such as but not limited to: post-harvest equipment and facilities research and development other marketing infrastructure provision of market information retraining, extension services, scholarships reduction of input cost and quality improvement supply chain efficiency and other infrastructure including access as well as an established transportation mechanism towards speedy delivery of products

9. Criteria that tell how a project relates to competitiveness Projects eligible for ACEF assistance should respond to the following competitiveness aspects: instill competitiveness in prices; instill competitiveness in quality; gives the product export potential; and import substitution.

10. extended as an interest-free and collateral-free loan* to eligible proponents; shall be extended in the form of grant to finance public investments that will increase the productivity of farmers; Loan proponents shall be required to put up an equity to their projects. *(except for those which the ExeCom may require to put up collaterals as loan security) Mode of which ACEF is extended

11. 1. Market Viability 2. Technical Viability 3. Organizational 4. Socio-Economic 5. Financial Viability CRITERIA FOR EVALUATING PROJECTS

12. PROCESS FLOW Part II

13. FLOW OF REPORTING/PROTOCOL ACEF EXECOM Co Chairs – DA Secretary; Chair of Agri and Food Committee HOR ; Chair, Committee on Agriculture, Senate Members from Government Financing Institutions and Private Sector rganizations DA Secretary/Co-Chair, ACEF Executive Committee Chair, ACEF Natl Techl Committee Policy Directions and Prioritization and Approval of projects below P15M; Loan Agreement In consultation with the Secretary, prioritization of projects prior to NTC deliberation; Techl Evaluation prior to endorsement to the Secretary/Execom; Techl & Admin supervision of the ACEF NTS; Loan Releasing in tranches DA Regional Field Units/ ACEF Regional Technical Committee Techl Evaluation/endorsement to the ACEF Natl Techl Committee; Monitoring and Evaluation COCAFM Oversight Functions Approval of projects P15M and above

14. ProponentDA RFUDA-CO ACEF NTC/NTS DA Secretary/ ACEF EXECOM Feasibility study; Documentary requirements Initial evaluation; Site validation; Regional prioritization; Endorsement to the ACEF NTC ACEF RTC/RTS Evaluation/ Validation; National prioritization; Evaluation by Technical Agencies; Background & Credit Investigation Prioritization Approval PROCESS FLOW OF LOAN APPLICATION

15. Request for SARO/NCA DEPARTMENT OF BUDGET and MANAGEMENT DEPARTMENT OF AGRICULTURE LANDBANK OF THE PHILIPPINES* DEPARTMENT OF AGRICULTURE Issuance of SARO/NCA Fund Transfer after Pre- Audit PROCESS FLOW OF FUND TRANSFER (after approval by the Secretary/ACEF EXECOM) *Land Bank of the Philippines provides the cashiering services for the releases of ACEF loan proceeds to the proponents and acceptance of payments per MOA by and between DA and LBP PROPONENTS Upon endorsement of DA RFU releases In tranches per Loan Agreement

16. Updates on the Utilization of the Agricultural Competitiveness Enhancement Fund (ACEF) As of June 2010 Part III

17. Source of FundsAMOUNT (PESOS) MAV In-Quota Tariffs (RA 8178, 1996)/ (1999 to 2007 collections) The BTr has not yet reported the duties on MAV utilization for 2008, 2009, 2010 9,441,114,688.80 Sugar Conversion Fees -- (EO 87, 1999) 1,141,345,966.40 Total Payment Collection (2002 -1st qtr 2010) – P206,719,560.65 Collection from 2002 to 1 st qtr of 2008 (Reverted to Treasury per RA 8178 of 1996) -- P102,819,977.81 Added to the ACEF (Special Fund) per RA 9496 of 2008 (collection from 2 nd qtr of 2008 to 1 st qtr of 2010) -- P103,899,582.84 103,899,582.84 TOTAL ACEF10,686,360,238.00 Source of Funds

18. Fund Utilization ACEF-(EXECOM) Approved Projects/Activities AVAILMENTS/DISBURSEMENTS Grant (DA AO 23,s 2007 & DA AO 14, s 2009) Loans Unreleased Loans Scholarship (P372,788,527.92 -- allocation per IRR) Admin Fund (2003) FS Fund (Reverted/2003) 2,576,020,918.00 5,887,558,883.00 79,968,663.00 120,397,356.44 5,033,400.00 10,000,000.00 TOTAL AMOUNT OF ACEF- EXECOM APPROVED ACTIVITIES/PROJECTS 8,678,979,220.44

19. Funds Available/Balance FUNDS AVAILABLE /ACEF BALANCE = 2,007,381,017.60

20. Total Amount Available in Fund 183 P2,007,381,017.60  Cold Chain Program*1,500,000,000.00 Scholarship (balance of the scholarship allocation per June 2009 available fund) 252,391,171.55 FUNDS ALLOCATION * approved by the ACEF EXECOM but no SARO has been issued and can be referred back to ACEF Execom to align with the priority program of the Department of Agriculture/DA Secretary

21. Summary of Activities Funded by ACEF Activities Amount (Pesos)% Machineries and Equipment 3,891,079,501.0044.80 Infrastructures & Buildings 2,473,583,419.0028.50 Research and Development Activities 129,318,772.001.50 Sugar-ACEF 599,543,000.006.90 Scholarship 120,397,356.441.40 Farm Inputs and Other activities 1,465,023,773.0017.00 TOTAL8,678,979,220.44100

22. Project Distribution by Category (Loans and Grant) CATEGORY NO. OF PROJ. % ACEF ASSISTANCE (PESOS) % Loan30796.245,908,514,252.0069.64 Grant123.762,576,020,918.0030.36 TOTAL 319100.008,484,535,170.00100.00

23. Regional Distribution of Projects (loans and grant) REGION NO. OF PROJ. %ACEF ASSISTANCE (PESOS)% Nationwide 7 (grant -4) 2.19% 2,553,181,210.00 (1,525,219,856.00) 30.09% Sugar ACEF 1 (grant) 0.31% 599,543,000.007.07% CAR 51.57% 99,161,110.001.17% I 206.27%383,789,646.004.52% II 134.08% 162,780,139.001.92% III 68 (grant-2) 21.32% 1,480,462,982.00 (155,888,477.00) 17.45% IV-A 5115.99%789,864,795.009.31% IV-B 7 (grant -2) 2.19% 151,596,142.00 (110,255,662) 1.79% V 144.39%155,992,014.001.84% VI 34 (grant -2) 10.66% 551,803,620.00 (46,487,600) 6.50% VII 113.45%145,453,196.001.71% VIII72.19%100,292,103.001.18% IX 134.08% 293,535,116.003.46% X 82.51% 135,043,736.001.59% XI 257.84% 320,843,479.003.78% XII 237.21% 400,800,219.004.72% XIII 20.63% 20,899,772.000.25% ARMM 103.13% 139,492,891.001.64% TOTAL 319100.00% 8,484,535,170.00100.00%

24. Distribution of Projects by Sector/Commodity SECTOR / COMMODITY NO. OF PROJ. % ACEF ASSISTANCE (PESOS) % FISHERIES & AQUACULTURE 4915.36%950,905,073.0011.21% GRAINS 288.78%943,552,875.0011.12% CORN82.51%133,755,960.001.58% RICE 20 (Grant – 1) 6.27% 809,796,915.00 (500,000,000.00) 9.54% HVCC 5818.18%1,001,653,267.0011.81% FRUITS, VEGETABLES, FOODS (AND RELATED PRODUCTS) 40 (Grant – 1) 12.54% 657,361,595.00 (100,000,000.00) 8.02% INDUSTRIAL 18 (Grant – 1) 5.64% 320,794,772.00 (10,255,662.00) 3.78% Sugar ACEFGrant - 10.31% 599,543,000.007.07% LIVESTOCK & POULTRY13642.63%2,221,049,783.0025.93% ABATTOIR 5 (Grant – 2) 1.57% 79,370,000.00 (26,000,000.00) 0.94% DAIRY41.25% 33,586,267.000.40% FEEDMILL134.08% 207,137,144.002.44% GOAT30.94% 30,449,054.000.36% MEAT PROCESSING41.25% 88,000,853.001.04% POULTRY6420.06%1,096,090,687.0012.92% SWINE/HOGS4513.48% 686,415,778.007.84% MULTI - SECTOR 4714.73%2,826,844,467.0032.87% FERTILIZERS71.88%107,410,543.001.03% ACTIVITY/TRAINING CENTERS30.94%46,031,335.000.54% TRACTOR / FARM MECH.123.76%74,951,045.000.88% MULTI-SECTOR / COMMODITY (LIVESTOCK, FISHERY, HVCC, etc.) 28 (Grant – 6) 8.15% 4,098,451,544.00 (1,340,222,256.00) 30.42% TOTAL319100.00%8,484,535,170.00100.00%

25. Project Distribution by Type of Proponent TYPE OF PROPONENT NO. OF PROJ. % ACEF ASSISTANCE (PESOS) % AGRI CORP9429.47%1,736,151,100.00 20.46 % COOP 4614.42% 530,727,878.006.26% LGU 12 Grant - 3 3.76% 320,933,920.00 (226,000,000.00) 3.78% NGA / GOV’T CORP 8 Grant - 5 2.51% 2,653,181,210.00 (1,625,219,856.00) 31.27 % SRA / Sugar ACEF) Grant 10.31% 599,543,000.007.07% SINGLE PROP15147.34%2,456,301,432.00 28.95 % SUC 7 Grant - 3 2.19% 187,696,631.00 (125,258,062.00) 2.21% TOTAL319100.00%8,484,535,170.00100.00

26. LOAN STATUS # Of Projects Amount (Pesos) % Not Due for Payment2265,143,865,518.0088 Fully paid with partial payment (69 projects) 3 43,208,000.00 163,511,460.00 4 Arrears/Undergoing Restructuring 78557,929,272.008 TOTAL3075,908,514,251.00100 Loan Status

27. YEAR ACTUAL REPAYMENT COLLECTION EXPECTED COLLECTION PER MOA SCHEDULE YEARLY RE- PAYMENT RATE 2002320,100.00620,100.0052% 200310,948,440.0016,697,202.0066% 200411,936,391.7030,321,391.7039% 200511,667,365.5049,296,676.1739% 200622,911,278.6794,612,463.2524% 200731,565,129.74130,709,173.1024% 2008 (1 st qtr )13,471,272.20 158,996,147.9022% 2008 (2 nd qtr - 4 th qtr) 21,185,200.19 200958,098,629.20236,774,061.6125% 2010 1 24,615,753.4569,221,255.9636% TOTAL 206,719,561.00 764,648,732.65 1. 2010 Collection (as of 31 March 2010 only) Repayment & Collection Status

28. ACEF Scholarship Program Total Number of Scholars 1,498 Total Number of SUCs/Institutions 36 TOTAL ALLOCATION (Duration of the Program, P) 120,397,356.00

29. 1. Insurance coverage to ensure recovery after natural calamities; 2.Further strengthen the capability of the DA RFUs in evaluating projects for funding under ACEF; 3. Further intensify monitoring of on-going projects by the ACEF NTS and DA RFUs; and 4. Strengthen the feedback mechanism/reporting of project status between the DA RFUs and the ACEF NTC/NTS Actions Taken/Plan of Action by the ACEF NTC

30. Thank You