Banks operating in the country extended P852 billion worth of loans to the agriculture and agrarian reform sector last year, 19.3 percent higher than the P713.6 billion disbursed in 2020.
Data released by the Bangko Sentral ng Pilipinas (BSP) showed the amount represented only 10.5 percent of its total loanable funds of P7.99 trillion, less than half of the 25 percent threshold under Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009.
Under the law that is a retention of Presidential Decree 717, banks are required to allocate 15 percent of total loanable funds for agriculture lending, while 10 percent should be made available for agrarian reform beneficiaries.
Loans disbursed to the agriculture sector went up by 20.9 percent to P776.44 billion from P642.37 billion for a 9.71 percent compliance ratio or below the required 15 percent.
Furthermore, lending for agrarian reform extended by banks also rose 5.7 percent to P75.32 billion in 2021 from P71.23 billion in 2020. The amount similarly fell short of the mandated 10 percent, or a compliance ratio of only 0.94 percent.
BSP Governor Benjamin Diokno said there is still time for the 18th Congress to pass legislation amending the agri-agra law.
“We recognize the limited time left for the 18th Congress. Among the bills supported by the BSP, we believe that the Agri-Agra bill may be prioritized by Congress considering that it is in the advanced stage of the legislative process,” the central bank governor said.