Repeal of Agri-Agra Act needed

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The Bangko Sentral ng Pilipinas (BSP) said the repeal of the Agri-Agra Act should free up funding for the agricultural financial ecosystem and the development needs of rural communities.

The central bank commended both houses of Congress for ratifying the report of the bicameral conference on the conflicting provisions of Senate Bill 2494 and House Bill 6134, titled “The Public Finance Act of 2022″. agriculture, fisheries and rural development,” in a statement released on Friday. .

The registered bill will be sent to Malacañang for the President’s signature as soon as possible.

“BSP has long lobbied for the repeal of Republic Act 10,000 to make it more responsive to the financing needs of farmers, fishers, and agricultural micro, small, and medium enterprises (MSMEs),” said the governor of the BSP, Benjamin Diokno. saying.

The proposal, Bangko Sentral said, takes a holistic approach to private sector funding by understanding that beneficiaries in rural communities are part of a larger social and economic support system. Beyond loans, the program aims to improve the capacity of our farmers and fishers, to modernize their enterprises and integrate them into national and export-oriented value chains.

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“Expanding the available modes of compliance with agricultural sector financing requirements will promote the financing of green finance projects, income-generating activities and public infrastructure projects, to the benefit of rural land reform and the agricultural sector. “, explained Diokno.

The abolition of the distinction between 10% land reform and 15% agricultural credit, the central bank said, is one of the important aspects of the bill, which should give banks more freedom in granting credit to agriculture and agrarian reform sectors according to their capacities. .

In addition, the BSP added, banks that cater to agricultural reform beneficiaries and communities would be allowed to use the entire 25 percent mandatory credit limit for the sector. It also establishes a multiplier for the credit offered to law-abiding borrowers. This is initially set at 10 to encourage banks to lend to the agrarian reform sector.

Banks that are unable to lend directly to beneficiaries in rural communities could help by investing in debt and equity securities, executing agricultural value chain finance, and providing loans to agribusinesses to finance projects. agricultural and community improvement initiatives, he said.



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