A LEGISLATOR has filed a bill seeking to ensure greater access to credit in rural communities.

Albay Rep. Jose Maria Clemente S. Salceda filed House Bill (HB) 6039 on Thursday to enhance Republic Act 10000 or the Agri-Agra Reform Act of 2009.

The bill seeks to solve what is says is the main cause of the failure of the 2009 law, which is “the lack of income-sustaining value chains for farmers and fisherfolk”.

“Agri-Agra requires banks to lend a certain portion of their portfolio to farmers and fisherfolk. Of course, it has not worked to the fullest because farmers aren’t banked in the first place. High-risk ang farmers for conventional banks. Bukod diyan, malayo ang bangko sa bukid. Marami pang requirements kaya magpapabalik-balik ka. Siyempre, ‘yung iba, sa malapit na five-six na lang hihiram” Mr. Salceda said in a statement.

Under the bill, lending to programs or projects that seek to make financial services available at little or no cost to farmers can be considered in assessing bank’s compliance with the Agri-Agra Reform Law.

The bill also extends credit access to programs and projects that “align with a more modern vision for agriculture”.

Despite accessibility issues, the congressman said farmers can still be included in the banking and lending system through virtual banking.

“Fortunately, we no longer have to do physical banking because of virtual applications that allow you to open a bank account in your cellphone and borrow from a BSP-registered bank. And because virtual banks operate at lower costs, mas mura ang loans na kayang ibigay. Virtual banking will grow even more accessible when my Virtual Banking Act is passed. Once that happens, my amendments to Agri-Agra will also help ensure that even farmers from remote communities can be included in the banking and lending system. Basta may signal — so let’s also pass the Public Service Act amendments” Mr. Salceda said.

HB 78, which was also filed by Mr. Salceda last July, seeks to amend the Public Service Act or Commonwealth Act 146 “to effect the necessary changes in the antiquated provisions of the law to increase its relevance to contemporary concerns”.

The Public Service Act is a law that was crafted in 1936 to govern and regulate public services in the country to ensure that basic public services were accessible to everyone equally.

HB 6039 also subjects the implementation of its provisions to congressional oversight, to ensure that policymakers are “responsive to possible needs and opportunities for enhancements”.

The measure also seeks to create an Agricultural and Fisheries Capacity-Building Finance Policy Council which will set targets for banks’ annual contributions, identify eligible recipients of the special fund, and undertake reporting, monitoring, evaluation and audit requirements of the activities financed.

According to Mr. Salceda, the amendments to the Agri-Agra Act is in response to the Bangko Sentral ng Pilipinas’ request to Congress that key financial reform bills be passed so that the country could reach A-credit rating in two years.

The amendments also follow the congressman’s other financial inclusion bills, including HB 5913 or the Virtual Banking Act, and the Financial Consumer Protection Act or HB 5976.

Mr. Salceda filed the Virtual Banking Act last Jan. 6 which seeks to provide a regulatory framework for virtual banks.

Meanwhile, the Financial Consumer Protection Act, which was filed last Tuesday, gives financial regulators the abilities of rulemaking, surveillance and inspection, market monitoring, and enforcement powers relative to consumer protection.

“The bills I have been filing are all interconnected. Social infrastructure, financial inclusion and protections, improvements in the business environment — all of them are part of a vision that foresees the country’s emergence as a predominantly middle-class society, yung pati farmer negosyante. These Agri-Agra amendments are crucial, especially the provision on financial inclusion for rural communities” Mr. Salceda said.

Quirino Rep. Junie E. Cua filed a similar bill last December which mandates banking institutions to strengthen the financing system for agricultural, fisheries, and rural development of the country.

HB 5681 was endorsed for plenary approval by the House Committee on Banks and Financial Intermediaries last Dec. 18. — Genshen L. Espedido