Agri-Agra law violators to face stiffer sanctions
Party List Reps. Michael Romero and Enrico Pineda have filed a bill that will increase penalties for banks that do not comply with loanable allocations under Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009.
Romero and Pineda, of 1Pacman party list, said the act mandates all banking institutions—government and private—to allocate at least 25 percent of their total loanable funds for agriculture and fisheries credit, of which at least 10 percent should be made available for agrarian reform beneficiaries.
“But records from the Bangko Sentral ng Pilipinas (BSP) showed that the total combined loanable allocations of banks for agriculture and agrarian reform beneficiaries are way below what is required under the law,” Romero said.
He noted that most banks do not allocate the loanable funds for agriculture and agrarian reform beneficiaries because of perceived risk to qualified borrowers and would rather pay the penalties instead.
Under the bill, the BSP will impose administrative sanctions and other penalties for non-compliance from 0.5 percent under the existing law to 2.5 percent of non-compliance and under compliance.
Of the penalties that will be collected, 90 percent will be allocated between the Agricultural Guarantee Fund Pool and the Philippine Crop Insurance Corporation according to the needs of the agri-agra sector while the remaining 10 percent will be used to cover administrative expenses of the BSP.
Article continues after this advertisementSection B of the bill provides that “officials liable for noncompliance and undercompliance of the provisions of this act shall be charged administratively and civilly in the manner that shall be formulated and decreed in the implementing rules and regulations of the Agri-Agra Reform Credit Act of 2009.”
Article continues after this advertisementBSP officials will also be penalized for refusing or failing to sanction erring bank officials.
Romero noted that qualified credit beneficiaries from the agricultural and fisheries sector have not been able to fully use the credit services provided by banks and other accredited rural financial institutions because of strict requirements imposed on them and high standars on the borrowers’ ability to pay off their loans, making it difficult for them to obtain loans.
