Amid the pending amendments to the Agri-Agra Reform Credit of 2009 (Agri-Agra Law), the Land Bank of the Philippines (LANDBANK) said it is open to revisiting its existing loan application requirements to make it easier for farmers and fishermen to borrow from the state-run bank.
In a statement, LANDBANK said it fully supports the ongoing Senate initiative to amend the provisions of Republic Act. (RA) 10000, otherwise known as the Agri-Agra Law.
Under RA 10000, banks are mandated to lend 25 percent of their funds to the agriculture sector. Of which, 15 percent should go to agriculture, while the remaining 10 percent must go to agrarian reform beneficiaries (ARB).
During a public hearing on the proposed Agri-Agra Law amendments, LANDBANK welcomed the recommendations from legislators to revisit its loan application requirements, specifically for small farmers and fishers, to make it easier for them to access financing.
However, the bank claimed that in 2019, even prior to the ongoing Agri-Agra law revisit, LANDBANK already started simplifying its loan processes to make the Bank’s programs more accessible to small farmers and fishers.
First, the loan application form was condensed from three documents to just one document and was reformatted with mostly tick boxes for easier completion.
Second, the Promissory Note was significantly trimmed from 14 pages to only 1 page.
LANDBANK said it has also consistently complied with the number of loans that should be lent to agriculture and agrarian reform.
As of December 2020, LANDBANK’s agriculture loans reached 76.95 percent and 11.52 percent for agrarian reform.
Overall, LANDBANK’s agriculture lending has been consistently growing from P222.05 billion in 2018, to P236.31 billion in 2019, and P237.62 billion in 2020.
Likewise, as of March 31, 2021, LANDBANK’s total loan portfolio to the agriculture sector also grew by 4.8 percent to P229.70 billion from P219.24 billion last February.
The increase is primarily attributed to a 9.5 percent rise in loans released to small, medium, and large enterprises.
A decade since RA 10000 took effect, the overall banking sector of the Philippines still fails to comply with the law.
Last year, President Rodrigo Duterte said during his fifth State of the Nation Address (SONA) that he wants to end the more than a decade of non-compliance of the Agri-Agra Act.
Agriculture Secretary William Dar said at the time that it’s good that Duterte brought up during his SONA the proposed laws that would amend the Agri-Agra Act.
“That’s a great development. With that law, the penalties that the banks pay for not complying with the Agri-Agra Law will be collected and will be utilized to support farmers,” Dar said.