MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP), together with the Department of Agriculture (DA) and the Department of Agrarian Reform (DAR), approved the amendments to the implementing rules and regulations (IRR) of the Republic Act (RA) 10000 or the Agri-Agra Reform Credit Act of 2009.
BSP Governor Benjamin Diokno said the amendment introduced to the implementing rules will help improve financing to the agrarian reform, fisheries, and agricultural sector.
“The amendments to the Agri-Agra IRR are the product of the concerted efforts of the DA, DAR, and the BSP to mobilize bank sector financing towards the agrarian reform, fisheries, and agricultural sector by addressing challenges identified in the operationalization of the Law,” Diokno said in a statement on Thursday.
“It is a timely and positive development since it will assist this sector to recover from the impact of the COVID-19 pandemic and other natural calamities,” he added.
In particular, the amendments to the IRR of Agri-Agra Law are the following:
- Expand the eligible modes of compliance with the ten percent (10%) agrarian reform credit requirement by including: (a) loans to members of agrarian reform households, and (b) financing of activities that shall generally benefit agrarian reform beneficiaries (ARBs) and/or ARB households as well as agrarian reform communities;
- Remove the accreditation requirement for debt securities to be considered as agri-agra eligible;
- Allow investments in shares of stock of companies that are primarily engaged in eligible agricultural activities as an eligible mode of alternative compliance; and
- Promote special lending arrangements that consider the holistic requirements of agricultural borrowers such as agricultural value chain financing.
The BSP said the amendments to the law’s IRR will “broaden access of the agrarian reform sector to bank financing, streamline banks’ process of investing in agri-agra eligible securities, and promote innovative financing solutions, within the legal ambit of R.A. No. 10000.”
The central bank, however, said that the IRR amendments are only an “interim measure” pending the passage of the proposed amendments to the Agri-Agra Law.
The BSP said it is currently pushing for the enactment of comprehensive amendments to the Agri-Agra Law which recommend a financing approach that considers the requirements of the broader agricultural ecosystem.
The proposed amendments to the law are envisioned to strengthen rural development and improve the well-being of agricultural and rural community beneficiaries, it added.