A bill that allows banks to expand assistance to the agriculture sector and make them comply with the Agri-Agra Law is still pending in the Senate more than a year after the House of Representatives passed the measure, the bill’s principal author said.
Camarines Sur Rep. Luis Raymund Villafuerte called on the Senate to hasten its approval of the measure following reports that lending institutions have again fallen short of their loan compliance to the sector in 2020.
Preliminary data from the Bangko Sentral ng Pilipinas showed the banking system was able to allocate only about 10 percent of its total loanable funds last year, way below the 25 percent mandated under the Agri-Agra Reform Credit Act of 2009.
Last year, Villafuerte said loans extended by banks for agriculture and agrarian reform slipped by 2.8 percent to only P713.6 billion from P733.92 billion in 2019.
House Bill 6134, or the proposed Rural Agricultural and Fisheries Development Financing System Act, was promptly transmitted last year to the Senate, where a counterpart version of the measure remains pending.
“The banks can hardly comply with the provisions of the Agri-Agra law not because of the lack of funds to lend to the agriculture sector, but because the only way they can comply is through loans, which they are wary of extending because of the lack of creditworthy agriculture projects,” Villafuerte said.
“HB 6134, which was approved by the House a year ago, aims to expand the modes of compliance for banking institutions in extending credit to the sector by, for one, allowing them to invest in bonds and stocks that would finance activities to boost agricultural productivity,” he said.