Sanctions imposed on banks that failed to satisfy the necessary credit score allocation for agriculture and land reform totaled greater than 13 billion pesos over an eight-year interval, in accordance with a central financial institution official.
“We collected round 13.4 billion pesos in agro-agricultural penalties from 2011 to 2018,” Lyn Javier, chief govt of the coverage and specialist oversight sub-sector of Bangko Sentral ng, informed lawmakers on Thursday. Pilipinas (BSP). the committee on agriculture, meals and land reform introduced collectively banks, monetary establishments and currencies.
Javier’s presentation confirmed that 45 % of the penalties, or 6.03 billion pesos, went to the Agricultural Assure Fund, which supplies assure protection to banks, cooperatives, farmers / organizations and corporations that finance small farmers and fishermen.
The identical sum was additionally handed on to the Philippine Crop Insurance coverage Corp., which supplies insurance coverage protection to farmers towards losses attributable to pure disasters, plant illnesses and pest infestations for his or her palay (unsalted rice). and their corn crops, amongst different crops.
Within the meantime, the ten%, or 1.34 billion pesos, went to the BSP.
Banks that don’t totally adjust to the 25% credit score requirement for beneficiaries of Republic Act 10,000, or the “Agri-Agra Reform Credit score Act of 2009”, face sanctions from the central financial institution.
Banks are required to allocate 15% and 10% of their complete mortgage portfolio to farmers and land reform beneficiaries, respectively, below the Agri-Agra Regulation.
On the finish of final 12 months, financial institution loans to agriculture and the land reform sector fell 2.76 %, beneath the minimal benchmark.
On the finish of 2020, the banking system put aside 713.599 billion pesos for the trade, in comparison with 733.921 billion pesos on the finish of 2019.
Agriculture and land reform obtained a mixed allocation of 10 % of complete loanable funds, beneath the necessary credit score of 25 %.
The agricultural sector obtained solely 9 % of complete loanable cash from banks. Throughout this time, they gave land reform beneficiaries only one % of their complete loanable funds.
BSP Governor Benjamin Diokno stated the central financial institution reform program contains amending the Agri-Agra Regulation, which “will strengthen rural growth by offering a holistic method to satisfy the financing wants of the ecosystem. broader agricultural financing “.