The House of Representatives has written off unpaid interest on loans secured by farmers, fishermen and agrarian-reform beneficiaries from the government.
It did so by approving via a unanimous 193-0 vote House Bill (HB) 4179 or the Agrarian and Agricultural Credit Condonation Act, which condones unpaid interests, penalties and surcharges of the loans from the Department of Agrarian Reform, Department of Agriculture, People’s Credit and Finance Corp., Cooperative Development Authority, National Food Authority and Quedan and Rural Credit Guarantee Corp.
Released by the six agencies was at least P3.7 billion in loans, inclusive of interests, but of which only P1.7 billion was paid back.
HB 4179 covers the loans granted for agricultural production; promotion of agricultural business and exports through acquisition of work animals, farm equipment and machinery, seeds, fertilizers, poultry, livestock and feeds; and construction, acquisition and repair of agricultural facilities.
Under the bill, the affected borrower should apply for condonation and should have already paid at least five percent of the loan principal at the time of the application for the condonation.
The borrower will only be granted a one-time condonation.
In their explanatory note, HB 4179 authors Cresente Paez and Anthony Bravo of Coop-Natcco party-list said it is imperative that such measure is passed, considering that farmers, fishermen and agrarian reform beneficiaries are not only entrepreneurs in rural areas but also partners in achieving progress.
“The measure is a win-win solution both for the delinquent borrowers who want to restore their credit credibility and for the government agencies who cannot write off interests, penalties and surcharges of delinquent accounts due to the limitation of the State Audit Code of the Philippines or Presidential Decree 1445. [Also], the bill provides safeguards to avoid abuse by borrowers,” Paez said.
“This measure supports the program of the Aquino administration toward inclusive growth. The government will not lose anything if the condonation program is implemented since only the interests, penalties and surcharges of delinquent loans will be condoned, not the principal amount,” Bravo said.