For not complying with the Agri-Agra Reform Credit Act of 2009, local banks were made to paid hefty penalties , according to the Bangko Sentral ng Pilipinas (BSP).
Maria Cynthia Sison, Bangko Sentral ng Pilipinas (BSP) Supervisory Policy and Research Department deputy director, said that on the average, banks pay around P2 billion in penalties every year.
BSP Governor Benjamin Diokno said banks have extended a total of P713.6 billion in agri-agra credit as of end-December 2020.
“Even with such an amount, banks were still unable to comply with the mandatory agri-agra credit,” he said.
Of the total loans extended by banks, P642.4 billion is accounted for by agricultural credit.
This amount, however, is about 9 percent of the compliance ratio and is below the 15-percent requirement.
Agrarian reform credit extended by banks to date amounts to PHP71.2 billion, a mere 1 percent compliance ratio vis-à-vis the 10-percent requirement under the Agri-Agra law.
Photo by PNA