Gov’t expands list of ARFIs for agri-agra lending network

Published April 23, 2019, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

The Bangko Sentral ng Pilipinas (BSP) and the Agricultural Credit Policy Council (ACPC) have increased the number of its accredited rural financial institutions (ARFI) for agri-agra lending to 35 from 30 last year, according to a circular memo.

Bangko Sentral ng Pilipinas (BSP) logo

The April 16 memo, signed by BSP Deputy Governor Chuchi G. Fonacier, listed nine ARFIs approved by the BSP, and 26 recognized by the ACPC.

Fonacier again stressed that an accreditation is not an endorsement from the BSP, and that the list of accredited rural banks are for “reference and guidance of lending and/or investing banks” only.

It used to be that BSP will only disclose the seven to 10 rural banks that they have named as ARFIs since 2012 but now includes the ACPC list which was created in 2016.

According to Fonacier in the memo, “under existing rules and regulations, a lending and/or investing bank intending to utilize its exposure to an accredited RFI to comply with the agri-agra report must disclose such exposure in its agri-agra report submitted to the BSP along with the RFls corresponding ARN (accredited reference number). Exposure to the accredited RFI shall be eligible for determining compliance with the agri-agra requirement for as long as the said RFI remains validly accredited until sooner revoked for non-renewal or non-compliance with the qualification requirements prescribed under existing rules and regulations.”

“In the event of disaccreditation,” she added, “the lending/investing bank is allowed to use its exposure to a disaccredited RFI for compliance with the agri-agra requirement for a grace period of only up to the next reporting quarter following the disaccreditation.”

The agri-agra report of the lending/investing bank will then be considered defective if a disaccredited RFI is declared and used for compliance with the agri-agra requirement beyond the grace period, said Fonacier.

The nine rural banks in the BSP list are: Producers Savings Bank Corp.; Rural Bank of Sta. Catalina; Common Wealth Rural Bank; Rural Bank of Bay; Rural Bank of Angeles; New Rural Bank of San Leonardo (Nueva Ecija); First lsabela Cooperative Bank; Rural Bank of San Mateo (lsabela); and Cavite United Rural Bank Corp.

Not in the list but were on it previously were Rural Bank of Kiamba, Rural Bank of Pilar (Bataan), and Rang-Ay Bank, Agri Business Rural Bank, Philippine Resources Savings Bank Corp. and Rural Bank of Gattaran (Cagayan).

ACPC, in the meantime, has accredited five more cooperatives as ARFIs in 2018, bringing the list to 26 from 21 in 2017.

The BSP said the accreditation is only in accordance with the provisions of the Agri-Agra Reform Credit Act of 2009 and should not be viewed as an “endorsement of the soundness” of the ARFIs.

“The accreditation cannot be used for any purpose other than for implementing the provisions of the Agri-Agra Reform Credit Act of 2009 and its relared rules and regulations,” said the BSP.

The RFIs were established as part of the implementation of the Agri-Agra Reform Credit law and the BSP list serves as guide to inform the public of which banks to approach.

The BSP has amended circulars detailing the rules and regulations of Republic Act 10000 (or the Agri-Agra law) which repealed Presidential Decree 717 in 2011 and listed alternatives for banks for easier compliance such as investments in housing and education/medical bonds and microbusinesses even if these are not agri-agra related.

The amended law has rationalized compliance by banks. It has retained the mandatory requirement of 25 percent that banks will set aside as loanable funds for agriculture and fisheries. Of the 25 percent, 10 percent are for agrarian reform-related loans.