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THE Department of Agriculture on Friday announced
that palay growers and other small farmers may avail themselves of
low-interest loans to be secured by Agricultural Guarantee Fund Pool
(AGFP).
Agriculture Secretary Arthur Yap
also said farmers tilling a maximum of five hectares each who are
unable to obtain collateral-free credit from the formal banking
sector may now borrow from government or private financial
institutions and have their loans secured to as much as 85 percent
through AGFP, which the Department of Agriculture (DA) administers
through the LandBank of the Philippines.
Yap said AGFP’s initial funding
of P500 million to P800 million will be sourced from the
contributions of government-owned and controlled corporations (GOCCs)
equivalent to 5 percent of their budget surplus in 2007. Land Bank
will cover P100 million.
Yap issued Administrative Order
No. 23 earlier this week giving small borrowers access to AGFP.
Three months ago, President
Arroyo issued AO 225 requiring GOCCs to channel 5 percent of their
respective net incomes into a new credit facility for food
productivity programs.
“The AGFP shall be used to
provide guarantee coverage to unsecured loans or financing extended
by financial institutions and other parties to small farmers engaged
in rice and/or food production projects or activities,” said Yap
in AO No. 23
Yap said Land Bank will serve as
the institutional manager of the AGFP for all guarantees extended to
all government financial institutions as well as to private
institutions like rural and cooperative banks, farmers’
cooperatives, credit suppliers and non-government organizations that
have good track records in lending or financing.
He said the AGFP will be
maintained for five years, subject to another five-year extension as
may be agreed upon by the DA and LandBank.
--Ira Karen Apanay
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