A bill aiming to overhaul the country’s warehouse receipts system to help boost farmer’s productivity, introduced by Senator Win Gatchalian, has been sponsored by Senator Koko Pimentel, III, chairman of the Senate Committee on Trade, Commerce, and Industry.
According to Gatchalian, he filed Senate Bill No. 2171, otherwise known as the Philippine Warehouse Receipts Act of 2019, because agriculture remains to be a central pillar of the Philippine economy, which accounts for 9 percent of the country’s gross domestic product.
“Agriculture remains to be a central pillar of the Philippine economy.”
“The legislation is a ‘win-win for farmers and consumers’ since it is expected to help boost the country’s agricultural productivity and food security, while improving farmers’ margins in the long run,” the legislator said.
To promote economic activity by increasing farmer’s access to low cost credit, the measure establishes a simplified modern framework for the storage of goods in warehouses through the creation of an online registry system where all electronic warehouse receipts can be registered and accessed.
The Security and Exchange Commission (SEC) would be tasked to create and maintain the registry. Warehouses would also be tasked to maintain a sub-registry for goods deposited in their custody.
The measure also establishes a warehousing accreditation council composed of the chairman of the SEC, the secretary of the Department of Trade and Industry (DTI), the secretary of the Department of Finance (DOF), the secretary of the Department of Agriculture (DA), and three warehousing experts who would be in-charge of accrediting warehouses and warehouse operators.
The council would be tasked to institute a system of accreditation for warehouse operators and warehouses; issue certificates of accreditation to qualified warehouse operators and warehouses, as well as monitor their performance to ensure to ensure their continuing compliance with the provisions of the bill.
The council would also be tasked to place under probation, suspend or revoke accreditation to any warehouse or warehouse operators that do not meet the criteria for accreditation set forth by the council.
The measure also establishes a warehouse relief assurance fund, managed by the SEC, which would be tasked to cover losses involving warehouse receipts stemming from Registry based failures, including but not limited to the irretrievable destruction of the Registry.
For his part, Pimentel lamented that most banks and other financial institutions do not accept warehouse receipts as collateral for loans as they do not have confidence in their economic value.
Aside from upgrading the century-old warehouse receipts law, Pimentel said the bill also provides an option for agricultural producers to safely store and delay the sale of their products, as well as help reduce post-harvest losses and improve product quality.
“With the passage of this bill, banks and other financial institutions will be more confident in extending credit collateralized by warehouse receipts. This will ultimately benefit our farmers and other MSMEs (micro, small and medium-sized enterprises) as this will enable them to easily borrow for their working capital needs,” Pimentel said.
“This will ultimately benefit our farmers and other MSMEs.”
