Latest Stories

Banks forced to comply with Agri-Agra law


The Bangko Sentral ng Pilipinas has put in place a stricter monitoring system for banks that will oversee their compliance with a tougher Agri-Agra law.

Under the latest version of the law, banks that fail to allocate at least 25 percent of their loanable funds to the agriculture sector will be penalized.

The BSP now requires banks to comply with an enhanced reportorial system for their lending to the agriculture sector, the regulator said in a statement.

“The BSP developed a new reportorial system to monitor the compliance of banks under the law. This report identifies in more detail how banks comply with the provisions of [Republic Act No.] 10000,” the central bank said.

Now that the law is being fully implemented following the release of its implementing guidelines late last year, the BSP has reminded banks of their need to comply with the monitoring system.

Banks that fail to comply face a penalty of 0.5 percent of the amount of involved.

The new monitoring system will help the BSP get a clearer picture of the status of banks’ lending agricultural lending activities, the regulator said.

The establishment of a new monitoring system came about despite the opposition of some industry members to the new Agri-Agra law.

Republic Act 10000, or the new Agri-Agra law, eliminated several alternative forms of compliance to the rule mandating banks to lend 25 percent of their funds to the agriculture sector—in particular, 15 percent for agriculture-related projects and 10 percent for agrarian reform beneficiaries.

Under the old law (Presidential Decree 717), loans of banks to housing and education sectors were considered alternative forms of compliance.

But the revised law has limited the alternative forms of compliance to borrowers that will use the money for initiatives that will also benefit the agriculture sector.

Under the law’s guidelines, the BSP said, one alternative form of compliance is lending to accredited rural financial institutions (RFIs), which are expected to use the borrowed funds for relending to borrowers from the agriculture sector.

The BSP has so far accredited three RFIs through which banks may comply with the new Agri-Agra law. These are the Rural Bank of Kiamba in Sarangani, Producer’s Savings Bank in Pasig City and Rural Bank of Barili in Cebu.

“RFIs act as direct conduits to the agriculture sector and agrarian reform beneficiaries by channeling the funds specifically allotted by other banks for the program. This gives RFIs a critical role in the funding chain,” the Bangko Sentral ng Pilipinas said in a statement.

Investment in bonds issued by government development institutions—such as Land Bank of the Philippines and Development Bank of the Philippines—where the proceeds will be used to fund agricultural projects, is also considered to be another form of compliance.

Paid subscriptions to shares of stocks of government entities like Quedan and Rural Credit Guarantee Corp. and Philippine Crop Insurance Corp. and government-accredited agricultural entities have also been identified as alternative forms of compliance.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Agri-agra law , Bangko Sentral ng Pilipinas , Banking , Laws

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Retired SC justice Lorenzo Relova; 98
  • Ligots fight 2nd forfeiture case
  • PH will be partly cloudy in afternoon, evening—Pagasa
  • Ex-COA chief nabbed for plunder
  • John Paul relics abound: Bloodied shirt, unwashed fork…
  • Sports

  • Sharapova advances to Stuttgart quarterfinals
  • Galedo caps ride of redemption
  • Beermen, Express dispute second semis slot today
  • Lady Agilas upset Lady Bulldogs in four sets
  • NLEX roars to 7th D-League win
  • Lifestyle

  • ‘Recovered’ Banksy works on display ahead of sale
  • Marinduque: Visiting the ‘palm of the ocean’
  • First at Vatican in 60 years
  • How Jing Monis Salon gave Krissy the pixie
  • Want to be a supermodel? Work on your inner beauty, says Joey Espino
  • Entertainment

  • Paul McCartney to play at Candlestick concert
  • Kristoffer Martin: from thug to gay teen
  • Has Ai Ai fallen deeply with ‘sireno?’
  • California court won’t review Jackson doctor case
  • Cris Villonco on play adapted from different medium
  • Business

  • PAL hailed for ban on shark fin cargo
  • BSP to change tint of P100 bill
  • Nielsen sees car buying boom in the Philippines
  • How author of best-seller exposed ‘one percent’ economic elite
  • Bangko Sentral readies new bank lending rules
  • Technology

  • Cloud strength helps Microsoft earnings top Street
  • Vatican announces hashtag for April 27 canonizations
  • Enrile in Masters of the Universe, Lord of the Rings?
  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • Opinion

  • Editorial Cartoon, April 25, 2014
  • No deal, Janet
  • Like making Al Capone a witness vs his gang
  • MERS-CoV and mothers
  • A graduation story
  • Global Nation

  • Only 4 Etihad passengers not accounted for
  • Abandoned in Malta,15 PH seamen return
  • Senator hopes PH will also get same vow
  • HK victims to get P115M; traders raised money
  • Afghan hospital guard kills 3 US doctors, including Fil-Am pediatrician
  • Marketplace