Palace certifies ‘farmlots as loan collateral’ bill

President Arroyo has certified as "priority administration measure" a bill seeking to promote the acceptability of agricultural lands as security for bank loans.

Negros Oriental Rep. Herminio Teves, House special committee on globalization chair, welcomed the President’s move, saying the bill, once enacted, would revitalize farm credit and help ease rural poverty.

"We have time and again stressed that lack of access to affordable credit is one of the factors that has stymied farm productivity," Teves pointed out.

"Declining productivity, in turn, has impoverished many farmers and eroded the global competitiveness of our agricultural products," Teves said.

"This Palace-certified bill should help address the problem," Teves added.

Under House Bill 5511, farmer-agrarian reform beneficiaries shall be allowed to mortgage their rights to the land awarded to them without losing their security of tenure.

The loans extended to agrarian reform beneficiaries who mortgaged their land rights shall be backed by the state-run Quedan and Rural Credit Guarantee Corp.

Four House committees – on appropriations, on ways and means, on agrarian reform and on banks and financial institutions – endorsed the bill for floor debate and approval in November last year.

The President sought the passage of HB 5511, also known as the proposed "Enhanced Collateral Value of Farmlands Act," before Congress goes on a Lenten break on March 22.