The House of Representatives unanimously passed on third and final reading Tuesday, Jan. 31 a bill that would condone unpaid loan interests, penalties, and surcharges incurred by farmers, fisherfolk, and other agrarian reform beneficiaries from government-led lending agencies.

Voting 271-0-0 (yes-no-abstain), the lower House gave its final nod to House Bill (HB) No. 5702, or the “Agrarian and Agricultural Loan Restructuring and Condonation Act", to benefit hundreds of thousands, if not millions, of farmers and fisherfolk.

“The proposed law removes a heavy financial burden on their part, as it seeks to write off millions in interests, penalties and surcharges on their loans. The condonation will be a big relief for our farmers and fisherfolk,” House Speaker Ferdinand Martin Romualdez said in a statement.

Aside from writing off the interests, penalties, and surcharges from loans obtained from under various lending programs of the Department of Agrarian Reform (DAR), Department of Agriculture (DA), People’s Credit and Finance Corp., Cooperative Development Authority (CDA), National Food Authority (NFA), and Quedan and Rural Credit Guarantee Corp., the bill would also give the beneficiaries a clean credit record.

As such, the clean credit record would give them the chance to avail of government credit for production and other farming needs, Romualdez explained.

The lawmaker pointed out that among the covered by the proposed measure “are beneficiaries of the original agrarian reform program of the government, which the late President Ferdinand Marcos Sr. launched through Presidential Decree (PD) No. 27".

Issued on Oct. 21, 1972, PD No. 27 “emancipated all tenant farmers working on private agricultural lands devoted to rice and corn, whether working on a landed estate or not".

Romualdez called the Tenant Emancipation Decree of Marcos Sr. the “mother” of all agrarian reform programs launched since the first Marcos administration.

Authors of HB No. 5702 include House Majority Leader Manuel Jose "Mannix" Dalipe, and Reps. Felimon Espares, Arnolfo Teves Jr., Solomon Chungalao, Francisco Paolo Ortega V, Linabelle Ruth Villarica, Allen Jesse Mangaoang, Wilton Kho, Angelo Marcos Barba, Joselito Sacdalan, Tsuyoshi Anthony Horibata, Robert Raymund Estrella, Jaime Cojuangco, Mohamad Khalid Dimaporo, Kristine Singson-Meehan, Eduardo Villanueva, Gus Tambunting, Joey Sarte Salceda, Charisse Anne Hernandez, Gabriel Bordado Jr., Bai Dimple Mastura, Marlyn Primicias-Agabas, Jane Castro, and Wilbert Lee.

Under the bill, the loans would be restructured and the good credit standing of farmers, fisherfolk and agrarian reform beneficiaries would be restored after the condonation of interests, penalties, and surcharges.

However, to qualify for the restructuring and restoration of good credit standing, the borrowers would need to make three consecutive payments on their reshaped loans.

Those covered by the bill need to file an application for condonation with the agencies from which they obtained their loans.

Aside from the DAR, DA, and NFA, loans from cooperatives registered with the CDA are also covered by the bill.

Farmers’ and agrarian reform beneficiaries’ organizations that have secured loans from the six aforementioned agencies would also benefit from the program.

The write-off would be based on “force majeure” and “market aberrations,” so refusal to pay would not qualify.

The measure defines “force majeure” as “events whether natural or political, beyond the reasonable control of a borrower, which have a material adverse effect on the ability of the borrower to pay an obligation.”

Market aberrations, on the other hand, are defined as “unusual adverse movements in market prices which have detrimental effects on the yield and income of farmers, fisherfolk and agrarian reform beneficiaries.”

The bill mandates the DAR secretaries, in consultation with the Bangko Sentral ng Pilipinas (BSP) and the heads of the five other lending agencies, to issue the implementing rules and regulations.