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Marcos says writing off farmers' loans a way to improve food supply
Marcos says writing off farmers' loans a way to improve food supply
Senator Imee R. Marcos today sought the condonation of farmers’ debts to enhance food security by allowing them to avail of new loans as if they are free from debts.
The lady lawmaker from the Ilocos region has sought to condone the unpaid loans of agrarian reform beneficiaries acquiring farmland, among the government’s response and recovery interventions in the Bayanihan to Recover As One Act (Bayanihan 2) to cope with the coronavirus disease (COVID-19) pandemic.
“The pandemic has disrupted food supply chains and pushed farmers into deeper debt, with community quarantines delaying the transport of farm production needs and the delivery and sale of harvested goods,” explained Marcos who is the chairwoman of the Senate economic affairs committee.
The proposed write-off of unpaid loans used to acquire farmland will cover principal amounts as well as interest payments and penalties, following general banking laws and regulations of the Bangko Sentral ng Pilipinas (BSP).
Liens and encumbrances attached to farmlands being acquired through government loans should also be lifted, Marcos explained.
Under the proposal, the Land Bank of the Philippines (LBP) will be asked to issue a certification of each write-off, paving the way for farmers to avail of other government lending programs.
Marcos lamented that although the LBP exceeded what the law prescribes that at least 10 percent of a bank’s total loans should go to farmers, loan growth in 2019 decreased to 6.4 percent compared to 21.1 percent in 2018.
Department of Finance (DOF) data and the LBP’s 2018 annual report showed that loan growth to farmers rose from P183.4 billion in 2017 to P222 billion in 2018 but slowed to P236.31 billion in 2019.
Also, the percentage of the LBP’s total loans that went to farmers decreased from 27.8 percent in 2018 to 26.5 percent in 2019, Marcos added.
“Bayanihan 2 is ready for a third reading and already includes a provision to enhance farmer access to credit during the pandemic. We just need to flesh out the provision to include condoning the unpaid loans of agrarian reform beneficiaries to make that happen,” she said.