Banks urged to buy more govt bonds to help farm sector

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Banks should invest more in government bonds, as well as those issued by state-owned lenders Land Bank and Development Bank, to help the Duterte administration provide more funds to develop the farm sector, Bankers Association of the Philippines said.

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“We believe that banks can help the farmers in more ways than one,” BAP Managing Director Cesar Virtusio said in a statement on Monday.

“In addition to the government securities, banks can assist the agriculture sector by buying bonds issued by Land Bank and the Development Bank of the Philippines to ensure that these institutions remain economically viable to carry out their mandate.”

Banks are mandated under the Agri-Agra law to set aside 25 percent of their funds available for lending to the agriculture sector. They have set aside P1.7 trillion for the sector, the BAP head said.

But Virtusio said given the bank’s growing funds available for lending and investments, they can also allocate more money for government debts.

“The banking industry hopes to support a sustainable, productive and efficient agricultural sector by allocating the necessary loanable funds required by the current agricultural landscape,” Virtusio said.

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