The government is planning to issue bonds to raise funds for the completion of the Department of Agriculture’s farm-to-market roads (FMRs) and its farm and fisheries mechanization program, Agriculture Secretary Emmanuel Piñol said.
Speaking at the Philippine Agricultural Journalists (PAJ) awarding ceremonies where he was guest speaker, Piñol said that a bond flotation was necessary to complete the agency’s network of FMRs before the end of President Duterte’s term.
He said the agency would need P140 billion to finish some 13,000 kilometers of FMRs all over the country, while another P60 billion would be required to finance the mechanization of farms and fishing communities nationwide.
Piñol said the proposed bond issue was already welcomed by Finance Secretary Carlos Dominguez III and Bangko Sentral ng Pilipinas Governor Nestor Espenilla, along with Eastern Samar Rep. Ben P. Evardone, who chairs the House of Representatives’ bank and finance committee.
“Both [Dominguez and Espenilla] said that the measure would utilize the vast resources of private and commercial banks that are required by law to lend 25 percent of their loan funds to the agriculture and fisheries sector,” Piñol said.
“Mechanization will cut down postharvest losses especially in rice and corn, and even in the fish catch. The country loses 16 percent of its grains harvest because of the lack of postharvest facilities while 40 percent of the fishermen’s catch is spoiled because of the absence of ice-making plants and cold storage,” he added.
Evardone added that the proposed bond flotation would allow banks to comply with the agri-agra law that requires them to set aside 25 percent of their loanable funds for agricultural and agrarian reform financing.
At present, banks hardly lend to the farm sector. To comply with the law, financial institutions simply invest in government securities that are eligible as substitutes for agricultural loans.
“I have discussed this concept of bond flotation with Secretary Dominguez and he believes floating bonds to finance the construction of this vital road network is a good investment in the future of our rural areas,” he said.
For 2019, the DA is hoping to get a budget of more than P200 billion. This is on top of the P1.5 billion that will come from the US government as part of its overseas aid scheme known as the Public Law 480 fund.