Thrift banks to extend loans to increase farm productivity
As the government eyes to sell P200-billion worth of bonds to fund agriculture-related programs, the Chamber of Thrift Banks (CTB) had sworn to extend loans to farmers to help them increase their farm productivity.
“CTB is committed to help farmers obtain a more dignified way of life through the extension of loans to increase farm productivity,” said CTB President Gregorio Anonas III.
This, as CTB backed the plan of the Department of Agriculture (DA) to sell bonds to raise funds for the completion of its farm-to-market roads (FMRs) and its farm and fisheries mechanization program.
CTB said the proposed bond floatation would allow banks to comply with the agri-agra law (the Agri-Agra Reform Credit Act of 2009) that requires them to set aside 25 percent of their loanable funds for agricultural and agrarian reform financing.
This initiative, according to them, is among the proposals elevated by CTB to legislators, particularly to Eastern Samar Representative Ben Evardone, chair of the House of Representatives’ Committee on Banks and Financial Intermediaries.
“We are grateful to Congressman Evardone and the DA for introducing this program which we view as a win-win proposition for both the banking and agri sectors,” Anonas, who also serves as the president of Wealthbank, said.
“CTB is likewise committed to its fiduciary responsibility to its depositors whose funds the banks are bound to protect,” he added.
The said fundraising is expected to pump DA’s budget for next year.
Agriculture Secretary Emmanuel Piñol earlier said that he might finally get his desired budget for his agency, or at least close to the more than P200 billion he requested for this year but failed to get.
Without giving exact figures, Piñol said DA’s budget next year could go up to an unprecedented level because on top of the annual budget it will receive from the national government, it would have other sources of additional funds.
Piñol said that for tier 1 alone, the agency’s budget next year already stands at P49 billion.
This, he said, could go bigger if the agency could successfully raise portion of the aforementioned planned P200-billion bond offer.
“That will be included in the budget,” Piñol said. “If we can raise it on time, it will be included [in 2019 budget] but I don’t see any problem because it was supported by Finance Secretary Carlos G. Dominguez and Central Bank Governor Nestor Espenilla”.
The bond sale, according to Piñol, will be done in tranches over the next three years.
Piñol said that bulk of the proceeds from the bond sale, or around P140 billion, will go to the construction of FMRs, while the remaining P60 billion will help the government accomplish its mechanization program for the farm sector. Both aimed at increasing the country’s food productivity.
Aside from this, Piñol is also looking forward for the initial release of budget under US Public Law 480 (US PL 480) program, which could also amount to hundreds of millions.
“The US PL480 will be included in the 2019 budget. The release will also be in tranches,” the DA chief said.
It was just in December when the DA already received the go signal from the US government to access the remaining funds under US PL 480 program, also known as the Agricultural Trade Development and Assistance Act, allotted to the Philippines.
The PL 480 program was enacted in 1934 by the American government so they could put to good use their agricultural productivity to help developing countries like Philippines address their food security.
Since it was launched, the Philippines has received hundreds of millions of dollars worth of grant from the US under PL 480, which includes loan agreements meant to fund agricultural projects such as FMR.
But due to lack of programs, some funds that were injected to US PL 480 only got stuck at the National Treasury over the years.
Had he known about US PL 480 earlier, Piñol said he would have proposed for the funds to be included in the 2018 budget of the DA.
For this year, the agency and its attached agencies will get a budget of P60.6 billion.