Sen. Imee Marcos. (Screen grab/Senate PRIB file photo)
MANILA, Philippines — Senator Imee Marcos pushed for an increase of loan releases to farmers, fishermen and agrarian reform beneficiaries by proposing higher penalties on banks that fall short of the level of lending.
Marcos, who chairs the Senate committee on economic affairs, said it’s high time for a penalty hike of 2 percent from 0.5 percent for banks who would fail to allot at least 25 percent of their loanable funds to agricultural and agrarian reform (agri-agra).
“An increase of the penalty from 0.5% to 2% can spur better lending, or at least better funding for agri-agra support mechanisms,” Marcos said in a statement on Thursday, citing the Agricultural Guarantee Fund Pool and the Philippine Crop Insurance Corporation, which the said law endows with 90 percent of the penalties collected.
All banks are required to allot 25% of their loanable funds to the agri-agra sectors under Republic Act (RA) 10000. Non-compliant banks would have to pay 0.5 percent of the computed discrepancy in required lending.
Marcos pointed out that the recent penalties were not deterrent enough as most banks would rather pay the fine rather than comply with law requirements.
She noted that the total loanable funds that government and private banks withheld from the agri-agra sectors had risen from about P460 billion in 2017 to more than P533 billion in 2018.
This prompted her to file Senate Resolution 1038 in 2019 to investigate the non-compliance and under compliance of banks with RA 10000. The resolution was finally taken up Wednesday during a hearing of the Senate committee on agriculture, food and agrarian reform chaired by Sen. Cynthia Villar.
“Banks should be more open to providing new normal loans supporting the shift to digitization, particularly e-marketing and e-commerce, green financing for environment-friendly technologies and products, as well as vaccination programs that farmers’ cooperatives may take up, even health and wellness tourism that may become a new facet of the agri-agra sectors,” Marcos said.