The Land Bank of the Philippines (LandBank) has thrown its support behind the speedy passage of the amendments to the Agri-Agra Law, saying reforms to the mandated credit legislation will help boost agricultural financing.
“The Land Bank of the Philippines fully supports the ongoing Senate initiative to amend the provisions of Republic Act 10000, otherwise known as the Agri-Agra Reform Credit of 2009 (Agri-Agra Law), which will provide farmers and fishers nationwide an expanded and easier access to responsive agricultural financing,” the bank said in a statement.
The state-owned lender has been one of the few big banks to actually comply with the mandated credit to the agriculture sector.
In end-2020, the bank reported that its agriculture loans reached 76.95 percent of its total loan portfolio, significantly above the minimum requirement of 15 percent. Its agrarian reform lending, meanwhile, hit 11.52 percent during the year, also above the 10 percent required under the agri-agra law.
LandBank’s figures are also better than industry average.
In 2020, data from the Bangko Sentral ng Pilipinas (BSP) showed that universal and commercial banks allotted only 9 percent of their total loan portfolio to agriculture, about 1 percentage point short of the mandated credit ratio. Their allotment for agrarian reform lending, is 0.88 percent of its total loan portfolio, barely touching the 10-percent requirement for all banks in the country.
LandBank also said it welcomes recommendations from legislators to revisit its loan application requirements, specifically for small farmers and fishers, to make it easier for them to access financing.
The BSP has also been actively lobbying for the passage of the amendments.
“The Agri-Agra Bill will strengthen rural development by providing a holistic approach in addressing the financing needs of the broader agricultural financing ecosystem,” BSP Governor Benjamin E. Diokno said.
One of the salient amendments is the enhanced access for rural communities to private sector financing through the expansion of modes of credit compliance for banks.
The proposed amendments also include the creation of an Agribusiness Management Capacity and Institution-Building Fund or the “Special Fund” that will be used to finance organizational-, capacity- and institution-building programs and activities of rural agricultural and fisheries households.
An Agricultural and Fisheries Finance and Capacity-Building Council will be established. This council will be responsible for the management and operations of the Special Fund.