A BILL condoning loan penalties and interest owed by farmers, fisherfolk and agrarian reform beneficiaries, giving them the opportunity to regain access to government and commercial credit, was approved on third and final reading in the House of Representatives on Wednesday.
With 209 affirmative votes, zero negatives and zero abstentions, the chamber approved House Bill 5083, which if passed into law will become the Agrarian and Agricultural Loan Restructuring and Condonation Act.
Under the bill, whose principal author is COOP-NATCCO Party-List Representative Sabiano S. Canama, all unpaid interest, penalties and surcharges owed by farmers, fisherfolk and agrarian reform beneficiaries to the Department of Agriculture (DA), Department of Agrarian Reform (DAR), People’s Credit and Finance Corp. (PCFC), Cooperative Development Authority (CDA), National Food Authority (NFA), and Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) will be condoned upon the approval of the application of a qualified borrower.
The measure lists four conditions for condonation: force majeure or market aberration; accumulated payments of not less than 5% of the loan principal should have been made at the time of application for condonation; one condonation only per borrower; and condonation of unpaid interest, penalties and surcharges from loans acquired through conduit banks subject to the rules and regulations set by the Bangko Sentral ng Pilipinas.
Covered by the condonation program are the agricultural and agrarian reform credit secured through DAR’s Credit Assistance Program-Program Beneficiaries Development of the DAR, DAR’s terminated credit program schemes, such as the Dutch Rural Development Assistance Program, DAR Direct Lending Financing Program, DAR Special Projects Office (SPO) Direct, and the SPO Window III Financing Program for Agrarian Reform Beneficiaries run by DAR and the Development Bank of the Philippines.
Other programs eligible for condonation are DAR’s Resettlement Loan Assistance Program for individual agrarian reform beneficiaries; agricultural credit secured through the DA’s High-Yield Crop Loan Assistance Program; agricultural credit secured through the PCFC’s Microfinance Program for Small Farmers and Fisherfolk and the Household program; and the CDA’s Cooperative Development Loan Fund.
The Farmers Level Grain Center of the NFA; Comprehensive Agrarian Reform Program-Barangay Marketing Center; and all agri-credit guarantee programs of QUEDANCOR are also expected to be included in the program.
Borrowers who restructure under the measure will be restored to client-in-good-standing status after three consecutive payments.
According to the 2018 Agricultural Indicators System of the Philippine Statistics Authority, agricultural loans granted to small farmers and fishermen totalled P618.79 billion in 2017, up 23.76%.
“It is to be noted that farmers and agrarian reform beneficiaries are not only entrepreneurs in bucolic areas but are also partners in the evolution of a better and brighter country. It is therefore imperative upon us to take an overwhelming care and attention by condoning these interests that burdened the debt,” Mr. Canama said in his explanatory note. — Genshen L. Espedido