Loans extended to the agriculture and agrarian reform (agri-agra) sectors increased quarter-on-quarter in September last year even as the total compliance rate of banks continued to languish below the requirement under the law.
The latest Bangko Sentral ng Pilipinas (BSP) data showed that across universal, commercial, thrift, rural and cooperative banks, total compliance to Republic Act (RA) No. 10000 or the Agri-Agra Reform Credit Act rose to P435.8 billion at the end of the nine months from P423.9 billion in June.
The end-September figure—comprised of both direct and alternative compliance—also exceeded the P400.1 billion in the first nine months of 2015.
Loans meant as direct compliance, which reached P218.3 billion as of September, slightly exceeded the P217.5 billion for alternative compliance.
During the first two quarters, the amounts for alternative compliance were more than the direct compliance.
For agrarian reform beneficiaries, total compliance at end-September was almost P30 billion.
The compliance rate for agrarian reform, however, was a mere 0.96 percent, even as the required lending under RA 10000 must be 10 percent of banks’ total portfolio. The minimum amount required to be allocated for agra loans as of end-September should have been P313.2 billion.
As for agriculture, total compliance was at P405.8 billion.
At end-September, the compliance rate for lending to agriculture stood at 12.96 percent, also below the requirement of 15 percent of total loanable funds generated equivalent to P469.8 billion.
Universal and commercial banks contributed the bulk of total agri-agra loans with over P396 billion, followed by rural and cooperative banks’ P22.5 billion, and thrift banks’ P17.3 billion.