Senator Cynthia Villar sponsors a new Agri Agra Law

In her sponsorship speech, Senator Cynthia Villar said that the Agri-Agra Reform Credit Act of 2008 or RA10000 should be revised to be more effective in reaching the agricultural sector and promote rural development.

Based on BSP data, banks have paid on the average P2billion in penalties per year for non-compliance with the Agri-Agra Reform Credit Act of 2009.

The banks have extended a total of PHP713.6 billion in agri-agra credit as of end-December 2020. Agri loans amounting to PHP642.4 billion is only 9 percent of the 15 percent compliance requirement in agricultural credit. While agrarian reform credit extended by banks amounting to PHP71.2 billion, is a mere 1 percent compliance ratio vis-à-vis the 10-percent requirement under the Agri-Agra law.

Hindrances to compliance cited are the limited kinds of allowed loans to purely agricultural production related activities and the targeted borrowers are restricted to farmers and agrarian reform beneficiaries only.

Villar said that the proposed law allows a wider mode of compliance for banks to achieve a wholistic approach to countryside development. This removes the distinction between 15 percent for agriculture and 10 percent for agrarian reform beneficiaries (ARBs) in the banks' portfolios and the broadening of the list of loan beneficiaries and activities that can be financed through bank loans or investments, as well as the welcoming other alternative modes of compliance.

All banks whether government or private, except newly established banks from the effectivity of the law shall set aside a credit quota of at least 25% of their total loanable funds for agriculture lending.

For newly established banks a five-year grace period is given within which no penalty shall be assessed.

Loans shall now cover all activities to include complimentary or agriculture and fisheries related activities to increase agricultural production improve the well-being of farmers and fisherfolk.

The farming family household members, farm workers, their associations and organizations and their Micro-Small-Medium enterprises can now avail of these loans.

Environmental projects such as privately- funded and LGU-funded irrigation systems, climate change mitigation, biodiversity protection and renewable energy projects shall be included.

Lending for the construction and upgrading of infrastructure including but not limited to farm to market roads as well as post harvest facilities that will benefit rural communities.

It shall facilitate the access by private companies engaged in agri activities and financing to avail of loans.

It also included special lending arrangements for agribusiness enterprises with qualified agricultural borrowers and agricultural value chain financing (VCF). The VCF includes not only production but also distribution, manufacturing, processing of agricultural products.

Allowed loans include those requested by all kinds of financial institutions operating and located in rural municipalities and not just rural financial institutions.

Projects that promote livelihood, skills enhancement and capacity-building activities consistent or analogous to the above shall also be recognized.

A special fund shall be set up from the penalties collected from banks which are unable to extend loans according to the provision of the new law, net of 25% - to the General Fund and the 10% for BSP to cover administrative costs.

Percentage of the proposed allocation shall be:

65% - for rural credit with minimal interest rates and minimum collateral requirements, to be shared equally by the LandBank and DBP;

35% for the Department of Agrarian Reform for the individual titling of collective Certificate of Land Ownership Award (CLOA) program.

Villar is hopeful that the new will strengthen the financing system to provide credit access and banking services to the rural communities, resulting in increased productivity, livelihood, employment generation and income.

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Senator Cynthia Villar, ini-sponsor ang bagong Agri Agra Law

Sa kanyang sponsorship speech, sinabi ni Senator Cynthia Villar na kailangang baguhin ang Agri-Agra Reform Credit Act of 2008 o RA10000 para mas maging epektibo sa agricultural sector at higit na maisulong ang rural development.

Base BSP data, nagbabayad ang mga bangko ng average na P2 bilyong multa kada taon sa hindi pagtupad sa Agri-Agra Reform Credit Act of 2009.

"The banks have extended a total of PHP713.6 billion in agri-agra credit as of end-December 2020. Agri loans amounting to PHP642.4 billion is only 9 percent of the 15 percent compliance requirement in agricultural credit. While agrarian reform credit extended by banks amounting to PHP71.2 billion, is a mere 1 percent compliance ratio vis-à-vis the 10-percent requirement under the Agri-Agra law," sabi no Villar.

Kabilang sa mga balakid sa hindi pagtupad nito ay ang limitadong uri ng pinapayagang pautang sa agricultural production na may kaugnayan sa mga gawain na hindi lamang para sa mga magsasaka at agrarian reform beneficiaries.

Pnapayagan ng panukalang batas ang mas malawak na pagsunod ng bangko para makamit ang 'wholistic approach' sa countryside development.

Tinatanggal nito ang pagkakaiba sa 15 percent sa agriculture at 10 percent sa agrarian reform beneficiaries (ARBs) portfolio ng mga bangko at pagpapalawak sa listahan ng loan beneficiaries at mga gawain na pedeng pondohan ng bank loans o investments at iba pang alternatibo.

"All banks whether government or private, except newly established banks from the effectivity of the law shall set aside a credit quota of at least 25% of their total loanable funds for agriculture lending," sabi pa ni Villar.

Para sa mga bagong tayong bangko, may five-year grace period para mag assess ang multa.

"Loans shall now cover all activities to include complimentary or agriculture and fisheries related activities to increase agricultural production improve the well-being of farmers and fisherfolk," pahayag pa ni Villar.

"The farming family household members, farm workers, their associations and organizations and their Micro-Small-Medium enterprises can now avail of these loans," dagdag pa niya.

Kasama rin dito ang Environmental projects gaya ng privately- funded at LGU-funded irrigation systems, climate change mitigation, biodiversity protection at renewable energy projects.

Mabibiyayaan din ang rural communities sa pagpapahiram sa construction at upgrading ng infrastructure kasama ang farm-to-market roads at post harvest facilities.

Tutulungan nito para mangutang ang private companies na nasa agri activities at financing.

Kasama rin ang special lending arrangements sa agribusiness enterprises na may qualified agricultural borrowers at agricultural value chain financing (VCF). Kabilang sa VCF hindi lamang ang production kundi oati distribution, manufacturing, processing ng agricultural products.

Ang mga pinapayagang pautang ay ang hiniling ng financial institutions na nag ooperate at matatagluan sa rural municipalities at hindi lamang rural financial institutions. Kikilalanin din ang mga proyektong nagsusulong sa livelihood, skills enhancement at capacity-building activities na naayin sa diro,

Magkakaroon ng special fund mula sa multang nakolekta sa bangko na hindi na kayang palawigin ang utang base sa probisyin ng bagong batas, may net ha 25% - sa General Fund at 10% para BSP para sakupin ang to administrative costs.

"Percentage of the proposed allocation shall be: 65% - for rural credit with minimal interest rates and minimum collateral requirements, to be shared equally by the LandBank and DBP;

35% for the Department of Agrarian Reform for the individual titling of collective Certificate of Land Ownership Award (CLOA) program," ani Villar.

Umaasa si Villar na mapalalakas ng bagong batas ang financing system para magbigay ng credit access at banking services sa rural communities. Ito ay magreresulta sa mas mataas na productivity, livelihood, employment generation at income.