MANILA, Philippines - Philippine banks booked double-digit growth in loans for agriculture and agrarian reform last year but continued to fall short of the mandated threshold, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The BSP reported the banking system was able to set aside a total of P488.2 billion of total loanable funds for agriculture and agrarian reform credit under Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009 last year or 12.8 percent higher than the P432.73 billion disbursed in the same period in 2015.
The total loanable funds generated by the banking industry surged 24.3 percent to P3.53 trillion last year from P2.84 trillion in 2015.
Despite the increase, the combined allocation of loanable funds from agriculture and agrarian reform of 13.83 percent last year was way below the minimum threshold set by the law.
RA 10000 retained the mandatory credit allocation in Presidential Decree 717 where 25 percent of banks’ total loanable funds are to be set aside for agriculture and fisheries in general, of which at least 10 percent should be made available for agrarian reform beneficiaries.
The BSP reported the loans extended by the banks to the agriculture sector amounted to P452.19 billion for 12.81 percent compliance ratio or below the required 15 percent.
The central bank said big banks or universal and commercial banks registered a compliance ratio of 12.75 percent after extending P422.56 billion to the agriculture sector while the ratio of thrift banks only reached 9.21 percent after granting P15.05 billion.
Rural banks extended P14.58 billion to the agriculture sector for a compliance ratio of 28.8 percent.
Likewise, the compliance ratio of the banking system fell way short of the 10 percent threshold for agrarian reform credit as banks only extended loans amounting to P36.01 billion for a compliance ratio of 1.02 percent.
The compliance ratio of big banks for agrarian reform loans only reached 0.74 percent while that of thrift banks settled at 1.92 percent.
On the other hand, the compliance ratio of rural and cooperative banks reached 16.44 percent.