The House agrarian reform committee has approved amnesty for unpaid loan interests secured by farmers, fisherfolk and other agrarian reform beneficiaries.
The approval came after the panel approved House Bill 187 or the Agrarian and Agricultural Loan Restructuring and Condonation Act, which provides leniency on unsettled interests, penalties and surcharges on loans availed of by the farmers, fishermen and agrarian reform beneficiaries from the Department of Agrarian Reform, Department of Agriculture, People’s Credit and Finance Corporation, Cooperative Development Authority, National Food Authority and the Quedan and Rural Credit Guarantee Corporation.
Specifically, the measure condones unpaid loan interests provided that condonation resulted from force majeure or events beyond the reasonable control of a loan borrower that have a material adverse effect on the ability of the borrower to pay an obligation or to market aberration and will, in no case, be applied to the willful default of the borrower to pay such loan.
Also, the condonation covers accumulated payments of not less than five percent of the principal loan, which shall have been paid at the time of application for condonation.
To encourage borrowing discipline and enhance creditworthiness, a graduation process will be followed in consonance with the plan of payment such that a borrower will be granted a one-time condonation only.
The condonation of unpaid interests, penalties and surcharges from loans acquired through conduit banks and financial institutions and the agencies mentioned above will then be in conformity with the applicable general banking laws and regulations of the Bangko Sentral ng Pilipinas (BSP).
“The measure aims to facilitate the reintegration of the financial and bank standing of farmers, fisherfolk and agrarian reform beneficiaries and give them access to new and additional government credit programs,” Rep. Deogracias Victor Savellano of Ilocos Sur, one of the authors of the measure, said in a statement.
“This will promote comprehensive rural development and agrarian reform through measures that will free farmers, fisherfolk and agrarian reform beneficiaries from the bondage of debt and poverty,” Rep. Anthony Bravo and Rep. Sabiniano Canama of COOP-NATCCO party-list said.
The sectors covered by the condonation program include agricultural and agrarian reform credit secured through the Credit Assistance Program; agricultural and agrarian reform credit secured through the terminated credit program schemes of the Department of Agrarian Reform such as the Dutch Rural Development Assistance Program, DAR Direct Lending Financing Program, DAR Special Projects Office Direct and the SPO Window III Financing Program for Agrarian Reform Beneficiaries of the DAR and the Development Bank of the Philippines; Resettlement Loan Assistance Program of the DAR for individual agrarian reform beneficiaries; and agricultural credit secured through the High Yield Crop Loan Assistance Program of the Department of Agriculture. LLANESCSA T. PANTI