MANILA, Philippines - The House of Representatives has approved on third and final reading a bill pardoning the unpaid interests, penalties and surcharges on loans secured by farmers, fisherfolk and agrarian reform beneficiaries from government agencies and finance institutions.
Passed was House Bill 6561 or the Agrarian and Agricultural Credit Condonation Act of 2010 that will allow farmers, fisherfolk, and agrarian reform beneficiaries to be reintegrated into the financial and banking system, and regain access to new and additional government credit programs.
The measure was sponsored by the House Committee or Agrarian Reform chaired by Negros Oriental Rep. Pryde Henry Teves. Principal authors of the bill include Reps. Cresente Paez and Jose Ping-ay, (COOP-Nattco party-list; Ma. Rachel Arenas (Pangasinan) Reena Concepcion Obillo (Una ang Pamilya party-list); and Rafael Mariano (Anakpawis party-list).
Under the measure, interests, penalties and surcharges imposed on loans secured by farmers, fishermen and agrarian reform beneficiaries from the Department of Agrarian Reform (DAR), Department of Agriculture (DA), People’s Credit and Finance Corporation, Cooperative Development Authority (CDA), National Food Authority (NFA) and the Quedan and Rural Credit Guarantee Corp. (Quedancor) will be condoned.
Covered by the condonation program are the agricultural and agrarian reform credit secured through the credit program schemes of DAR such as the Dutch Rural Development Assistance Program; resettlement loan assistance from DAR; High Yield Loan Assistance Program of DA; the cooperative loan fund under the CDA and the Farmers Level Green Center of the NFA.
Teves said, however, the condonation is limited to force majeure and market aberration as reasons why debtors fail to pay. He said condonation would not be extended to persons who intentionally defaulted on loan payments.
The lawmaker said the bill is aimed at encouraging “borrowing discipline and enhancement of credit worthiness” for borrowers.
Mariano said under the bill, credit condonation may be granted only once and the restructured loan would be computed based on the financial capacity of the borrowers upon the approval of their application.
“The bill also provides that restructured loans shall be restored to performing status or status of good standing upon three consecutive payments of the borrower of the required amortization,” Mariano said.
Arenas said the bill would facilitate the “reintegration of the beneficiaries” into the financial and banking system, and help them access new and additional credit and other government programs.