MANILA, Philippines - Ten rural and thrift banks have been accredited by the Bangko Sentral ng Pilipinas (BSP) to receive infusions from other lenders for compliance with the Agri-Agra Law of 2009.
The BSP, through Circular Letter 2013-040, identified these lenders as Rural Bank of Kiamba Inc., Producers Savings Bank, Rural Bank of Barili (Cebu) Inc., Rural Bank of Sta. Catalina Inc. and Philippine Resources Savings Banks Corp.
Also accredited were Rural Bank of Pilar (Bataan) Inc., Common Wealth Rural Bank Inc., Rang-Ay Bank Inc., Agri Business Rural Bank Inc. and Rural Bank of Bay Inc.
Under – the law, local banks are required to allot at least 25 percent of their total loanable funds for agriculture and fisheries credit. Broken down, 10 percent of that portion should be set aside for agrarian reform beneficiaries, while the remaining 15 percent should be allotted to agriculture and fisheries.
Cash infusion to rural and thrift banks is one of he wa shanks can comply with the law aside from direct lending.
Other means are investmenting in securities issued by Development Bank of the Philippines and Land Bank of the Philippines.
They also include investment in shares of Quedan and Rural Credit Guarantee Corp. as well as lending to construction of farm infrastructure such as including farm-to-market roads.
The law was enacted to provide adequate credit sources for the agriculture sector, which accounts for a tenth of the local economy and employs millions of Filipinos.
“The accreditation issued by the BSP is solely for the purpose of certifying that the loan portfolio of the above listed (firms) complies with the qualification requirements prescribed under the relevant law, rules and regulations,†the circular said.
“The accreditation does not serve as an endorsement by the BSP of the safety and soundness of the above listed banks,†it added.