DA welcomes revised IRR of Agri-Agra law

The Department of Agriculture (DA) on Friday welcomed the signing of the amended implementing rules and regulations (IRR) of Agri-Agra Reform Credit Act of 2009.

In a statement, the DA said the revised IRR of Republic Act No. 10000 will ensure the availability of agriculture and agrarian reform credit which will provide the much-needed boost to increase the level of  productivity and farmers' incomes.

“After more than a decade since its enactment, and the fair share of controversies and problems in its implementation, we now have finalized and signed on January 20, 2021 the amendments of the IRR of the Agri-Agra Law, which would facilitate higher investments by banks in the agri-agra sectors,” said Agriculture Secretary William Dar.

“The signing of the amended IRR came at a very opportune time as our agri-fishery sector takes up the challenge of leading the economic recovery amid the protracted health crisis,” he said.

The amended IRR was jointly drafted by the Bangko Sentral ng Pilipinas (BSP), DA and Department of Agrarian Reform (DAR), in consultation with the banking industry.

The IRR takes effect 15 days after publication.

The IRR amendments are the following:

• Deletion of the accreditation requirements for debt securities;

• Expansion in the modes of compliance with the agrarian reform credit;

• Expansion of agri-agra eligible purposes;

• Amendment to the computation of total loanable funds of newly-established banks; and

• Extension of loans to borrowers for purposes of financing activities identified under Section 23 of R.A. No. 8435, including palay housing and farming homestead.

The amendments will also reduce operational challenges faced by banks in complying with the provisions of R.A. 10000, according to the DA.

BSP Governor Benjamin Diokno, in previous statements, said that the central bank is eyeing wider implementation of the Agri-Agra Law, allowing banks to invest part of their mandated portfolio in "green projects" and other forms of resiliency projects and investments in rural communities.

Diokno said that banks find it hard to meet the total 25% threshold if they only lend to the agri-agra sector, thus, the BSP is exploring ways to help financial institutions comply with the requirement of the law.

As of end-2019, banks have only extended P714.5 billion worth of loans to the agriculture sector, or about 52% of the P1.384 trillion they should have lent out to beneficiaries, according to BSP data. -MDM, GMA News