Farmers who borrowed money from the government to buy land will soon be able to avail of new loans, as if they were free from debt, Senator Imee Marcos said.
Marcos, who chairs the Senate committee on economic affairs, has sought to condone the unpaid loans of agrarian reform beneficiaries acquiring farmland, among the government’s response and recovery interventions in the Bayanihan to Recover As One Act (Bayanihan 2) to cope with the COVID-19 pandemic.
“The measure will help ensure food security by giving back to our farmers who play the major role in ensuring it,” according to Marcos, who is also a member of the conference committee reconciling the Senate and House versions of Bayanihan 2.
“The pandemic has disrupted food supply chains and pushed farmers into deeper debt, with community quarantines delaying the transport of farm production needs and the delivery and sale of harvested goods,” she explained.
“Condoning unpaid loans will give farmers fresh access to other government lending programs that will help them maintain, if not increase, their productivity amid the pandemic,” Marcos added.
The proposed write-off of unpaid loans used to acquire farmland will cover principal amounts as well as interest payments and penalties, following general banking laws and regulations of the Bangko Sentral ng Pilipinas.
Liens and encumbrances attached to farmlands being acquired through government loans should also be lifted, Marcos said.
The Land Bank of the Philippines (LBP) will be issuing a certification of each write-off, paving the way for farmers to avail of other government lending programs.
Marcos lamented that although the LBP exceeded what the law prescribes that at least 10% of a bank’s total loans should go to farmers, loan growth in 2019 decreased to 6.4% compared to 21.1% in 2018.
Department of Finance data and the LBP’s 2018 annual report showed that loan growth to farmers rose from Php183.4 billion in 2017 to Php222 billion in 2018 but slowed to Php236.31 billion in 2019.
Also, the percentage of the LBP’s total loans that went to farmers decreased from 27.8% in 2018 to 26.5% in 2019, Marcos added.
“Bayanihan 2 is ready for a third reading and already includes a provision to enhance farmer access to credit during the pandemic. We just need to flesh out the provision to include condoning the unpaid loans of agrarian reform beneficiaries to make that happen,” Marcos said.