Agrarian and Agricultural Loans to Be Condoned – BRAVO


The House committee on agrarian reform unanimously approved this week a bill seeking to condone the unpaid loan interests secured by farmers, fisherfolk, and agrarian reform beneficiaries.

House Bill No. 187, or the “Agrarian and Agricultural Loan Restructuring and Condonation Act,” seeks to provide leniency on unsettled interests, penalties, and surcharges on loans availed of by farmers, fishermen, and agrarian reform beneficiaries from the Department of Agrarian Reform (DAR), Department of Agriculture (DA), People’s Credit and Finance Corporation (PCFC), Cooperative Development Authority (CDA), National Food Authority (NFA), and the Quedan and Rural Credit Guarantee Corporation (QUEDANCOR).

The bill was approved in a hearing presided by the committee’s senior vice chairman Rep. Deogracias Victor Savellano (1st District, Ilocos Sur). He said the measure aims to facilitate the reintegration of the financial and bank standing of farmers, fisherfolk, and agrarian reform beneficiaries and give them access to new and additional government credit programs.

Savellano said the bill is of major significance as it is one of the legislative priorities of the 17th Congress. A similar bill was passed on third reading by the House during the 16th Congress, he said.

According to the bill’s authors, COOP-NATCCO Party-list Reps. Anthony Bravo and Sabiniano Canama, HB 187 aims to promote comprehensive rural development and agrarian reform through measures that will free farmers, fisherfolk, and agrarian reform beneficiaries from the bondage of debt and poverty.

The beneficiaries under the bill are the farmers, fisherfolk, agrarian reform beneficiaries, and agrarian reform beneficiary organizations.

The bill provides that in order to provide safeguards and prevent abuses, the proposed condonation shall be granted only on the following conditions: (1) it is limited to force majeure, which the measure defines as “events whether natural or political, beyond the reasonable control of a loan borrower, which have a material adverse effect on the ability of the borrower to pay an obligation,” or to market aberration and shall, in no case, be applied for the willful default of the borrower to pay such loans; and (2) the accumulated payments of not less than five percent of the loan principal shall have been paid at the time of application for condonation; (3) to encourage borrowing discipline and enhance creditworthiness, a graduation process shall be followed in consonance with the plan of payment such that a borrower shall be granted a one-time condonation only; and (4) the condonation of unpaid interests, penalties and surcharges from loans acquired through conduit banks and financial institutions and the agencies mentioned above shall be in conformity with the applicable general banking laws and regulations of the Bangko Sentral ng Pilipinas (BSP).

The following are covered by the condonation program: (a) Agricultural and Agrarian Reform credit secured through the Credit Assistance Program; (b) Agricultural and Agrarian Reform credit secured through the terminated credit program schemes of the DAR, such as the Dutch Rural Development Assistance Program (DRDAP), DAR Direct Lending Financing Program (DDLFP), DAR Special Projects Office (SPO) Direct, and the SPO Window III Financing Program for Agrarian Reform Beneficiaries of the DAR and the Development Bank of the Philippines; (c) Resettlement Loan Assistance Program of the DAR for individual agrarian reform beneficiaries; (d) Agricultural Credit secured through the High Yield Crop Loan Assistance Program of the DA; (e) Agricultural credit secured through Microfinance Program for Small Farmers and Fisherfolk and the Household of the PCFC; (f) Cooperative Development Loan Fund of the CDA; (g) Farmers Level Grain Center of the NFA; (h) Comprehensive Agrarian Reform Program-Barangay Marketing Center (CARP-BMC) and all agri-credit guarantee programs of QUEDANCOR.


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